couple finances a house valued at $150,000. They make a $10,000 down payment and finance the remainder for 30 years at 6.8%. Taxes on the property are estimated to be $621 per year. Insurance on the property is projected to cost $685 per year.
The monthly PITI payment is:
Please do not post any more math questions this evening.
If you post your attempts at answers, someone may help you.
actually I couldn't figure out how to wrangle this ?, hence the reason for posting it.
PITI means Principal, interest, taxes and insurance.
You will need to calculate the monthly payment (principal and interest) by amortizing the loan over 30 years. Add on insurance and taxes and you've got the PITI payment.
The $150,000 house has a down payment of $10,000, so only 150,000-10,000=140,000 needs to be financed.
There is no mention of the compounding period, so take it as annual compounding at i=6.8%=0.068.
Number of periods (years) is n = 30.
The borrowed amount, A, is 140,000.
The monthly payment, R can be calculated from
A(1+i)^30 = R((1+i)^30-1)/i
Solving for R gives
R=A*i*(1+i)^30/((1+i)^30-1)
Post your answer for a check if you wish.
To calculate the monthly PITI (Principal, Interest, Taxes, and Insurance) payment, we need to consider the principal amount, the interest rate, property taxes, and insurance.
1. Principal Amount: The couple financed the remaining amount after the down payment, which is $150,000 - $10,000 = $140,000.
2. Interest Rate: The interest rate is 6.8% per year. To calculate the monthly interest rate, divide it by 12 months: 6.8% / 12 = 0.5683% per month.
3. Property Taxes: The yearly property tax is $621. To calculate the monthly property tax, divide it by 12 months: $621 / 12 = $51.75 per month.
4. Insurance: The yearly insurance cost is $685, which is equivalent to $685 / 12 = $57.08 per month.
Now, we can calculate the monthly PITI payment.
Monthly Interest Payment:
Multiply the principal amount ($140,000) by the monthly interest rate (0.5683%):
$140,000 * (0.5683 / 100) = $795.62
Total Monthly Payment:
Add the monthly interest payment, monthly property tax, and monthly insurance:
$795.62 + $51.75 + $57.08 = $904.45
Therefore, the monthly PITI payment is $904.45.