Question

Keith is purchasing a $215,000 home with a 30-year mortgage at 5.5%. Because he is not making a down payment, PMI in the amount of $93.50/month is required for the first 2 years of the loan. Based on this information, what is the total cost of this loan?

A. $452,092.10
B. $444,923.03
C. $441,714.00
D. $421,369.20

Answer 1

the answer is c apex

Answer 2

$441,714.00

Explanation:

Cost of the home = $215,000

Period of the mortgage = 30 years

Rate of Interest = 5.5% = 0.055

PMI = $93.50/ month for 2 years

Total PMI = 93.50 * 24 = $2,244

Mortgage amount to be repaid every month = 215000 divide by

`\frac{((1+{.055/12}))^(360)-1)}{((1+{.055/12}))^(360))*(.055/12)}`

= 215000/176.1218 = 1220.75

Total cost of the loan = 1220.75*360 + 2244 = 439470 + 2244

= $441,714

Hope it helps.

Thank you !!