Consider the 35-year fixed-rate home loan of $184,500 with an interest rate of 7.75%. What is the monthly payment?
A) $1,263.51
B) $1,290.61
C) $1,277.06
D) $1,266.56
E) $1,285.88

Question

Consider the 35-year fixed-rate home loan of $184,500 with an interest rate of 7.75%. What is the monthly payment? ​
A) $1,263.51
B) $1,290.61
C) $1,277.06
D) $1,266.56
E) $1,285.88

Quizplus · Accepted Answer

The monthly payment for a fixed-rate mortgage can be calculated using the formula for a fixed-rate mortgage payment, which is $P = \frac{rP_V}{1 - (1 + r)^{-n}}$, where $P$ is the monthly payment, $P_V$ is the principal loan amount, $r$ is the monthly interest rate (annual interest rate divided by 12), and $n$ is the total number of payments (loan term in years multiplied by 12). Plugging in the values: $P_V = \$184,500$, annual interest rate = 7.75%, so $r = 0.0775/12$, and $n = 35 \times 12$, we can calculate the monthly payment. The correct calculation aligns with option C, $1,277.06.

Consider the 35-Year Fixed-Rate Home Loan of $184,500 with an Interest