Question

Megan and Steve have found a home they want to purchase. The selling price is $320,000. They will put 20% down and get a 30 year, 6% APR, monthly payment mortgage. Insurance is $1,800 per year and taxes are $3,000 per year. What is their monthly PITI?

a. $1,684.85
b. $1,784.85
c. $1,934.85
d. $1,534.85

Answer 1

c. $1,934.85

Step-by-step explanation:

given data

selling price is $320,000

down payment = 20 %

APR r = 6% = 0.005 monthly

Insurance amount i = $1,800 per year

taxes T = $3,000 per year

Total time period n = 30 year = 360 months

solution

first we get here Principal Amount on the Loan that is

P = $320,000 - 20% down payment

P = $320,000 - $64,000 = $256,000

and now we get here Monthly PITI Payment that is express as

C =
`(r* P )/(1-(1+r)^(-n)) + (T)/(12) + (i)/(12)` ...............1

C =
`(0.005 * 256000 )/(1-(1+0.005)^(-360)) + (3000)/(12) + (1800)/(12)`

so The Monthly Payment is $1934.85.

correct answer is c. $1,934.85