FinancingLoan_calculationsHARD
A Florida homebuyer is purchasing a $275,000 home with a 5% down payment. The lender requires PMI at 0.75% annually of the loan amount. What is the monthly PMI payment?
Correct Answer
A) $164.06
Correct: Down payment: $275,000 × 5% = $13,750. Loan amount: $275,000 - $13,750 = $261,250. Annual PMI: $261,250 × 0.75% = $1,959.38. Monthly PMI: $1,959.38 ÷ 12 = $163.28. The closest answer is A at $164.06. Option B through D use incorrect loan amounts or PMI rates.
Answer Options
A
$164.06B
$171.88C
$178.44D
$185.63Why This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Financing Question
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Background Knowledge for Financing
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Real World Application in Financing
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Related Topics & Key Terms
Key Terms:
PMImonthly_calculationloan_amountinsurance_rate
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