Abe Aster bought a new split level for $200,000. Abe put down 30%. Assuming a rate of 11 1/2% on a 30-year mortgage, Abe's monthly payment is:
A) $1,423.80
B) $1,386.41
C) $1,367.80
D) $1,982.00
E) None of these

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of the mortgage. Since Abe put down 30%, he borrowed 70% of the purchase price:

$200,000 x 0.70 = $140,000

Next, we need to calculate the monthly payment with the given mortgage rate of 11 1/2% and a 30-year term. To do this, we can use a mortgage payment calculator or a financial calculator.

Using a mortgage payment calculator:

Input: 
Loan amount: $140,000 
Interest rate: 11.5% 
Term: 30 years

Output: 
Monthly payment: $1,386.41

Therefore, the best answer is choice B, $1,386.41.

Abe Aster Bought a New Split Level for $200,000