Question

Shane is paying $0.40 per $100 on his $455,000 home in homeowners’ insurance annually. If his annual homeowners’ insurance premium is divided into twelve equal monthly payments to be included on each of his monthly mortgage payments of $2325.00, what is his total monthly payment

Answer 1

$2,476.67

Explanation:

Data provided in the question:

Annual insurance amount paid = $0.40 per $100 on his $455,000 home

Monthly mortgage payments = $2325.00

Now,

Annual insurance amount = [ $0.40 ÷ $100 ] × $455,000

= $1,820

Therefore,

Monthly insurance amount = [ Annual insurance amount ] ÷ 12

= $1,820 ÷ 12

= $151.67

Therefore,

His total monthly payment

= Monthly mortgage payments + Monthly insurance amount

= $2325.00 + $151.67

= $2,476.67