They have found a very nice town house available for $200,000.Assuming a 20% down payment and a 30-year fixed rate mortgage at 6.65%,what will their PITI be? Annual property taxes are $2,400 and homeowner's insurance premium is $900 per year.
A)$1,027.14
B)$1,283.93
C)$1,302.14
D)$1,558.93

Question

Quizplus · Accepted Answer

The first step is to calculate the loan amount:

Down payment = 20% of $200,000 = $40,000

Loan amount = $200,000 - $40,000 = $160,000

To calculate the monthly mortgage payment, we can use a mortgage calculator or an Excel spreadsheet function called PMT. Using PMT, the formula is:

=PMT(6.65%/12, 30*12, $160,000)

This gives us a monthly mortgage payment of $1,027.14.

To calculate the total monthly payment (PITI), we need to add the property taxes and homeowner's insurance premium:

PITI = $1,027.14 + $200 + $75 = $1,302.14

Therefore, the best choice is (C).

They Have Found a Very Nice Town House Available for $200,000.Assuming