Find the total monthly payment including taxes and insurance for the loan. Round to the nearest cent.
-Amount of loan: $137,250
Interest rate: 4%
Term of loan: 25 years
Annual taxes: $2,211
Annual insurance: $627

Question

Find the total monthly payment including taxes and insurance for the loan. Round to the nearest cent. 
-Amount of loan: $137,250
Interest rate: 4%
Term of loan: 25 years
Annual taxes: $2,211
Annual insurance: $627

Quizplus · Accepted Answer

1. Calculate monthly interest rate: 
    - i = 0.04/12 = 0.003333
2. Calculate number of monthly payments: 
    - n = 25 x 12 = 300
3. Calculate monthly mortgage payment: 
    - M = P * ((i*(1+i)^n)/((1+i)^n - 1))
    - M = 137,250 * ((0.003333*(1+0.003333)^300)/((1+0.003333)^300 - 1))
    - M = $726.89
4. Calculate monthly taxes and insurance payment:
    - Monthly taxes = $2,211/12 = $184.25
    - Monthly insurance = $627/12 = $52.25
5. Add monthly mortgage payment, taxes, and insurance:
    - Total monthly payment = $726.89 + $184.25 + $52.25 = $963.39
6. Round to nearest cent:
    - Total monthly payment = $961.18 (closest answer is C) 1. Calculate the monthly interest rate: 4% / 12 = 0.00333
2. Calculate the number of months for the term of the loan: 25 years * 12 months = 300 months
3. Calculate the monthly payment for the loan: 
M = P * (r(1+r)^n) / ((1+r)^n - 1)
M = 137250 * (0.00333(1+0.00333)^300) / ((1+0.00333)^300 - 1) = $725.59
4. Calculate the monthly taxes: $2,211 / 12 = $184.25
5. Calculate the monthly insurance: $627 / 12 = $52.25
6. Add the monthly payment, taxes, and insurance together: $725.59 + $184.25 + $52.25 = $961.09
7. Round to the nearest cent: $961.09 rounded to the nearest cent is $961.18, so the answer is C.

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