Question

In many cases, lenders allow homeowners to included their homeowners insurance premium with their monthly mortgage payment. Tim’s home is worth $279,500. If his homeowners insurance premium is $0.33 per $100, how much is added to his monthly mortgage payment for insurance?
a. $7.69
b. $76.86
c. $92.35
d. $922.35

Answer 1

If you would like to know how much is added to Tim's monthly mortgage payment for insurance, you can calculate this using the following steps:

$0.33 ... $100
$x = ? ...$279,500

0.33 * 279,500 = 100 * x    /100
x = 0.33 * 279,500 / 100
x = $922.35

The correct result would be d. $922.35.

Answer 2

The amount that is added to his monthly mortgage payment for insurance is B. $76.86.

How to calculate the insurance?

The amount for a month premium will be:

= $0.33/13

= $0.0275

Now the premium for $279500 will be:

= 0.0275/100 × 279500

= $76.86

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