Question

Rebecca is purchasing a house for $210,000, with a 15-year fixed-rate mortgage at 4.5% interest. She has made a 5% down payment. The house is valued at $198,000, and the local tax rate is 4.5%. Her homeowners insurance is $840 per year. What are her total monthly payments?
A. $2437.20
B. $2520.09
C. $2630.20
D. $2381.89

Answer 1

I think the answer c

Answer 2

Solution:

Cost of the house with a 15-year fixed-rate mortgage at 4.5% interest= $ 210,000

Actual cost of house = $ 198,000

Down payment made by Rebecca

=5 % of $ 198,000

$=\frac{5}{100} \times 198,000\\\\ = 5 \times 1980=9900$$

Local tax paid by Rebecca = 4.5 % of $ 198,000

$=\frac{4.5}{100} \times 198,000\\\\ =4.5 \times 1980=8910$$

Homeowners insurance per year made by Rebecca= $ 840

Total interest paid = $ 210,000 - $ 198,000

                 = $ 12,000

She will pay this money in 15-years at fixed-rate mortgage of 4.5% interest.

Money that Rebecca will pay at the end of each year

$=\frac{12,000}{15}\\\\ = 800$

Mortgage rate = (4.5 % of 198,000) Per yearly

$=\frac{4.5}{100} \times 198,000\\\\ =4.5 \times 1980=8910$$ yearly

Total money that Rebecca has to pay after each passing year = 9,900+8,910+840+800+8910=$ 29,360

Amount that Rebecca has to pay monthly=

             $=\frac{29360}{12}\\\\ =2446.66$$

Option (A)  $2437.20 appears appropriate.