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%?

a. $1,569.27
b. $1,937.12
c. $2,152.35
d. $3,314.59

Answer 1

The Answer is B) 1937.12

Answer 2

b. $1,937.12

Explanation:

Given,

Purchasing price of house = $345,000,

Down payment = 10 % of the purchasing price

`=(345000* 10)/(100)`

`=(34500000)/(100)`

`=\$34500`

Thus, the principal value of the loan, P.V. = Purchasing price - Down payment

= $345,000 - $34500

= $ 310500

Also, the annual rate of percentage = 6.375% = 0.06375,

⇒ The rate per month, r=
`(0.06375)/(12)`

Time, n = 30 years = 360 months

We know that,

The monthly payment of a loan is,

`P=(r(P.V.))/(1-(1+r)^(-n))`

`=((0.06375)/(12)(310500))/(1-(1+(0.06375)/(12))^(-360))`

`=1937.11603586\approx \$1937.12`

⇒ Option B is correct.