Peter wants to buy a duplex with a purchase price of $226,950. Peter can afford a 10% down payment. Peter earns $2,985 a month and wants to spend no more than 10% of his income on his mortgage payment. Peter is going to rent out the other half of the duplex. He thinks that if he charges $900 a month in rent this will cover the remainder of his mortgage payment. Given that Peter has a 30 year mortgage with a fixed rate of 6.25%, how should Peter adjust how much he charges for rent of the other half of the duplex?
Answers
Answer:
He needs to charge $432.70 more for the rental.
Step-by-step explanation:
Purchase Price = $226,950
Find the downpayment:
Downpayment = 10% of $226,950 = $22,695
Find the loan amount:
Loan amount = 226,950 - 22,695 = $204,255
Find the interest:
Interest = 6.25% of $204,255
Interest = 0.0625 x 204,255 = $12765.94
Find the mortgage payment per month:
Loan per year = 204,255 ÷ 30 = 6808.94
Loan with interest = 6808.94 + 12765.94 = $19574.44
Payment per month = 19574.44 ÷ 12 = $1631.20
Find the payment from his salary:
10% x $2985 = $298.50
Find the amount he needs to charge from the rental:
Amount needed = $1631.20 - $298.50 = $1332.70
Difference in amount:
Difference = 1332.70 - 900 = $432.70
Answer: He needs to charge $1332.70 for the rental, which is $432.70 more than his initial charge of $900.
Answer:
B. 60$
is rite trust me