Answer:
$238,600
Step-by-step explanation:
The amount being borrowed is 100% -10% = 90% of the purchase price, or ...
0.90 × $138,000 = $124,200.
Then the monthly payment can be computed using the amortization formula:
A = P(r/12)/(1 -(1 +r/12)^(-12t))
A = 124200(.04875/12)/(1 -(1 +.04875/12)^(-12·30)) ≈ 657.28
and the total repaid is ...
(360 months) × ($657.28/month) = $236,619.58*
The cost of mortgage insurance is considered part of the cost of the loan. That amount is ...
(77 months) × ($25.88/month) = $1992.76
so the total amount paid for the loan is ...
$236,619.58 +1992.76 = $238,612.34
The cost of the loan is about $238,600.
_____
* In figuring the total repayment cost, we used the full-precision value for the loan payment. The actual repayment amount will depend on the rounded value of the loan payment and the way the final payment is made. When rounded to the nearest $100, these details become unimportant.
Answer:
The cost of the loan is $238,600
Step-by-step explanation:
The amount being borrowed is 100% - 10% = 90% of the purchase price
0.90 x $138,000 = $124,200
Use the amortization formula to calculate the monthly payment:
A= P(r/12)/(1-(1+r/12)^(-12t))
A= 124,200 (.04875/12)/(1-(1+.04875/12)^(-12-30)) = 657.28
The total repaid is (360 months) x ($657.28/month) = $236,619.58
The cost of mortgage insurance is considered part of the cost of the loan. That amount is (77 months) x ($25.88/month) = $1,992.76
The total amount paid for the loan is $236,619.58 + 1,992.76 = $238,612.34
Answer rounded off to the nearest one hundred dollars is $238,600
