Answer:
$1,667.04
Explanation:
To find the total monthly payment for the mortgage, property tax, and fire insurance, we need to first calculate the monthly mortgage payment using the given information.
The first step is to calculate the monthly interest rate by dividing the annual interest rate by 12:
⇒ 8.5% / 12 = 0.00708333
Next, we need to calculate the total number of monthly payments over the life of the loan:
⇒ 25 years x 12 months/year = 300 months
Using the formula for the monthly payment on a mortgage:
⇒ M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
where M is the monthly payment, P is the loan amount, i is the monthly interest rate, and n is the total number of payments, we can calculate the monthly payment on the mortgage:
⇒ M = $193,000 [ 0.00708333(1 + 0.00708333)^300 ] / [ (1 + 0.00708333)^300 – 1 ] = $1,544.21
Next, we need to add the annual property tax and fire insurance premiums and divide by 12 to get the monthly amounts:
⇒ Property tax = $979 / 12 = $81.58
⇒ Fire insurance = $495 / 12 = $41.25
Finally, we add the monthly mortgage payment, property tax, and fire insurance to get the total monthly payment:
⇒ $1,544.21 + $81.58 + $41.25 = $1,667.04
Therefore, the total monthly payment for the mortgage, property tax, and fire insurance is $1,667.04 rounded to the nearest cent.