Math

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Mike purchased a home the mortgage is $235,000 at 8 3/4 % for 25 years. His annual property taxes on the home are $6,345 he also has to pay hazzard insurance in the amount of $1,479. What is the PITI payment of their loan ?

I am not to sure about this one
The choices are A. 1,849.45 B. 2,586.05 or C. 652.00

My answer is c

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  1. Mike purchased a home the mortgage is $235,000 at 8 3/4 % for 25 years. His annual property taxes on the home are $6,345 he also has to pay hazzard insurance in the amount of $1,479. What is the PITI payment of their loan ?

    I am not to sure about this one
    The choices are A. 1,849.45 B. 2,586.05 or C. 652.00

    My answer is c

    The loan payment derives from
    R = Pi/[1 - (1+i)^-n]/i where P is the loan value, n = the number of interest periods = 25(12) = 300 and i = the montly decimal equivalant of the interest rate = .0875/12 = .0072916666.

    Thus, R = 235,000[1 - (1.0072916666)^-300]/.0072916666 = 1932.03.

    The monthly payment for the taxes and hazard insurance are (6345 + 1479)/12 = $652.

    Therefore, the total monthly payment is $2584.03, close to B.

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