If the purchase price for a house is $218,500, what is the monthly payment if you put 3.5% down for a 30 year loan with a fixed rate of 6.5%?

a. $1,332.73
b. $1,378.19
c. $1,247.54
d. $646.40

a. $1332.73

Step-by-step explanation:

The price of house = $218,500

Down payment = 3.5%

Down payment = 3.5% of 218,000

= 0.035*218000

Down payment = $7630

Loan amount = $218000 - $7630 = $210,370

To find the monthly payment we use the following formula:

= [P x R x (1+R)^N]/[(1+R)^N-1], where P stands for the loan amount or principal, R is the interest rate per month [if the interest rate per annum is 11%, then the rate of interest will be 11/(12 x 100)], and N is the number of monthly installments.

= [210370*6.5/(12*100) *(1 + 0.0054)^360 divided by (1.0054)^359

When we simplify, we get

= $1332.73

a. $1332.73

its electric no smoke

step-by-step explanation: