acouple 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.

Question

acouple 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:

plz help i have no idea how to do this

Answer 1

same question, different numbers

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Answer 2

To calculate the monthly PITI payment (Principal, Interest, Taxes, and Insurance) for the financed house, you'll need to consider a few different factors:

1. Principal amount: The initial amount borrowed, which is $150,000 minus the down payment of $10,000, so the principal is $140,000.

2. Interest rate: In this case, it is given as 6.8%.

3. Loan term: The loan is financed for 30 years, which is equivalent to 360 months.

4. Taxes: The annual property tax is estimated to be $621.

5. Insurance: The annual insurance cost is projected to be $685.

Now, let's break down the calculation step-by-step:

Step 1: Calculate the monthly interest rate
Divide the annual interest rate by 12 to get the monthly interest rate.
Monthly interest rate = (6.8 / 100) / 12 = 0.0056667

Step 2: Calculate the monthly principal and interest (P&I) payment
To calculate the P&I payment, you can use the formula for a fixed-rate mortgage:
P&I payment = P * (r * (1 + r)^n) / ((1 + r)^n - 1)
Where:
P = Principal amount ($140,000)
r = Monthly interest rate (0.0056667)
n = Total number of payments (360 months)

P&I payment = 140,000 * (0.0056667 * (1 + 0.0056667)^360) / ((1 + 0.0056667)^360 - 1)
P&I payment = $895.02 (rounded to the nearest cent)

Step 3: Calculate the monthly tax payment
Divide the annual tax payment by 12 to get the monthly tax payment.
Monthly tax payment = $621 / 12 = $51.75

Step 4: Calculate the monthly insurance payment
Divide the annual insurance cost by 12 to get the monthly insurance payment.
Monthly insurance payment = $685 / 12 = $57.08 (rounded to the nearest cent)

Step 5: Calculate the monthly PITI payment
The monthly PITI payment is the sum of the monthly P&I payment, tax payment, and insurance payment.
Monthly PITI payment = 895.02 + 51.75 + 57.08 = $1,003.85 (rounded to the nearest cent)

Therefore, the monthly PITI payment for the financed house is approximately $1,003.85.