Beverly Frost bought a home for $190,000 with a down payment of $19,000 at 7% for 25 years. Since then the rate has risen to 9%. How much more would her monthly payment be if she bought the house at 9%?
A)$208.97
B)$436.40
C)$143.00
D)$227.43
E)None of these

Question

Quizplus · Accepted Answer

First, determine the original loan amount: $190,000 - $19,000 = $171,000
Next, calculate the original monthly payment using an amortization table or a mortgage calculator:
$1,242.40
Finally, calculate the new monthly payment using the loan amount and new interest rate:
$1,469.83
Subtract the original monthly payment from the new monthly payment to find the increase:
$1,469.83 - $1,242.40 = $227.43

Beverly Frost Bought a Home for $190,000 with a Down