Question

Rob and Laura wish to buy a new home. The price is $187, 500 and they plan to put 20% down. New Rochelle Savings and Loan will lend them the remainder at a 10% fixed rate for 30 years, with monthly payments to begin in one month. Ignore taxes. How much will their monthly payments be? a. $1, 512.56 b. $1, 325.99 c. $1, 316.36 d. $1, 645.45

Answer 1

Answer:

The Answer is C. $1,325.99

Explanation:

The monthly equated formula is used to reach out on monthly installments

total amount needed to buy a new home is =$187500-($187500*20%=$150000

Therefore loan required is $150,000 which will be repaid over 30 years i.e 30*12=360 months

Interest=10%/12=.008333

Installment=.00833*(1+.00833)^360/(1+.00833)^-360=3.27

Installment=(3.27*150000)/360=$1325.99