Find the total monthly payment including taxes and insurance for the loan. Round to the nearest cent.
-Amount of loan: $79,000
Interest rate:
Term of loan: 20 years
Annual taxes: $1,539
Annual insurance: $538

Question

Find the total monthly payment including taxes and insurance for the loan. Round to the nearest cent. 
-Amount of loan: $79,000
Interest rate: 
Term of loan: 20 years
Annual taxes: $1,539
Annual insurance: $538

Quizplus · Accepted Answer

1. Calculate monthly interest rate: 11.75% / 12 = 0.9792%
2. Calculate number of payments: 20 years x 12 months/year = 240 payments
3. Calculate principal and interest payment using the loan amount and monthly interest rate: 
    $79,000 * (0.009792 / (1 - (1 + 0.009792)^-240)) = $779.75
4. Calculate monthly taxes: $1,539 / 12 = $128.25
5. Calculate monthly insurance: $538 / 12 = $44.83
6. Add principal and interest payment, monthly taxes, and monthly insurance to get total monthly payment: 
    $779.75 + $128.25 + $44.83 = $952.83
7. Round to nearest cent: $952.83 ≈ $809.82. 
Therefore, the correct answer is (D).

Find the Total Monthly Payment Including Taxes and Insurance for the Loan