Question

You are interested in living near Biola for generations to come. You find a $1,098,888 home near the park. Assuming you put 20% down, how much interest would you pay during month 2? Assume you receive a 30 year fixed mortgage, paid monthly, with a rate of 3.75%.

Group of answer choices $2,847.33 $2,747.22 $2,945.09 $2,993.41

Answer 1

A	Total purchase Price of House		1098888
B	Downpayment(20%)		219777.6
	Amount Of Loan(A-B)		879110.4
	Yearly Rate of Interest = 3.75%
	Monthly Interest Rate = 3.75%/12
	Monthly Interest Rate = 0.3125%
	Interest amount = Amount of Loan * Rate of Interest
	Interest amount = 879110.4*0.3125%
	Interest Amount = $2747.22
	Hence the Correct answer is B. $2747.22