Melissa is purchasing a $160,000 home and her bank is offering her a 30-year mortgage at a 4.9% interest rate. In order to lower her monthly payment, Melissa will make a 20% down payment and will purchase 3 points. What will her monthly mortgage payment be?

A. $645.98

B. $650.46

C. $662.93

D. $606.69

Melissa monthly mortgage payment is $679 which is close to option C ( $662.93)

Step-by-step explanation:

The cost of the house = $160,000

Melissa will make 20% down payment which is equivalent to 0.2 of $160,000

= $32,000

The balance to be paid would be $160,000 -$32,000 = $128,000

Using the periodic interest rate formula which is expressed by the formula:

P = a/[{(1+r)^n]-1}/{r(1+r)^n}]

here;

P = the monthly payments.

a = the amount of the loan = $128,000

r = the annual rate.  = 4.9%/ 12  = 0.049/12 =0.004083

n = number of monthly payments. = 12 × 30 = 360

Thus;

P = 128,000/[{(1+0.004083)^360]-1}/{0.004083(1+0.004083)^360}]

P = 128,000 /[{(1.004083)^360]-1]/0.004083(1.004083)^360]]

P = 128,000 / [(4.336-1) / 0.004083( 4.336)]

P = 128,000 /[(3.336)/ 0.0177]

P = 128,000/188.47

P = $ 679

Melissa monthly mortgage payment is $679 which is close to option C ( $662.93)

g

step-by-step explanation: