The value of the Financing loan is $185,500
. The Rate per month is 5.125%.
We will use the formula [tex] PV = PMT \times\frac{( 1 - ( 1+r)^{-n})}{r}[/tex]
Where PV is the Present Value of financing, which is $185,500
PMT=Payment every month, which is to be found.
r=interest rate=5.125%
n=number of months in 30 years=12\times 30=360
[tex] \therefore 185,500 = PMT \times \frac{1-(1+\frac{5.125}{1200})}{\frac{5.125}{1200}} =PMT \times 183.6591[/tex]
Therefore, [tex] PMT =\frac{185,500}{183.6591}=1010.02[/tex]
Therefore Molly's monthly payments are $1010.02.
Thus Option A is the correct option.
