Question

If the purchase price for a house is $345,000, what is the monthly payment if you put 10% down for a 30 year loan with a fixed rate of 6.375%?

Answer 1

It would be b.$1,937.12.

Thank you! I am sorry if this was a bit late.

Answer 2

The monthly payment would be $1,937.12

Explanation:

1. Organize the data:

Initial Value= $345,000

Down Payment = 10% of Inicial Value

Nper (Number of payments)= 30 years

Rate = 6.375%

2. Down Payment

As it is 10% of the Initial Value, you could calculate it as is shown in the following:

10% =
`(10)/(100)` = 0,1

10% *
`(345,000)` = 0,1 * 345,000 = 34,500

3. Present Value (PV)

The total amount that will be borrow is:

PV = Initial Value - Down Payment

`PV=345,000 - 34,500\\ PV=310,500`

4. Adequate the data: To determine the monthly payment is better adequate the Nper and Rate in months as following:

`Nper=30 years*(12 months)/(1 year) =360 months\\Rate= (6.375)/(12)=0.531` %= 0.00531

5. Apply the equation: Remember that the equation that calculate the payment for a loan based on constant payments is:

`c=(PV*Rate)/(1- (1+Rate)^(-Nper))`

6. Perform the equation: Replace the numbers in the corresponding variables of the upper equation.

`c=(310,000*0,00531)/(1- (1+0,00531)^(-360))\\c=1,937.12`

Finally, the monthly payment would be $1,937.12