Questions: Find the total monthly payment, including taxes and insurance, for the following loan. Amount of Loan Interest Rate Term of Loan Annual Taxes Annual Insurance Monthly Payment ------------------ 97,000 7% 10 years 1,250 540 Complete the table below. Amount of Loan Interest Rate Term of Loan Annual Taxes Annual Insurance Monthly Payment ------------------ 97,000 7% 10 years 1,250 540 (Simplify your answer. Round to the nearest cent as needed.)

Find the total monthly payment, including taxes and insurance, for the following loan. Amount of Loan Interest Rate Term of Loan Annual Taxes Annual Insurance Monthly Payment ------------------ 97,000 7% 10 years 1,250 540 Complete the table below. Amount of Loan Interest Rate Term of Loan Annual Taxes Annual Insurance Monthly Payment ------------------ 97,000 7% 10 years 1,250 540 (Simplify your answer. Round to the nearest cent as needed.)
Transcript text: Find the total monthly payment, including taxes and insurance, for the following loan. Amount of Loan | Interest Rate | Term of Loan | Annual Taxes | Annual Insurance | Monthly Payment ---|---|---|---|---|--- $97,000 | 7% | 10 years | $1,250 | $540 | Complete the table below. Amount of Loan | Interest Rate | Term of Loan | Annual Taxes | Annual Insurance | Monthly Payment ---|---|---|---|---|--- $97,000 | 7% | 10 years | $1,250 | $540 | $\square$ (Simplify your answer. Round to the nearest cent as needed.)
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Solution

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Solution Steps

Step 1: Calculate Monthly Interest Rate

The monthly interest rate is calculated from the annual interest rate: \[ \text{monthly interest rate} = \frac{0.07}{12} = 0.0058333 \]

Step 2: Calculate Number of Payments

The total number of monthly payments over the loan term is: \[ \text{number of payments} = 10 \times 12 = 120 \]

Step 3: Calculate Monthly Mortgage Payment

Using the loan amortization formula, the monthly mortgage payment is calculated as follows: \[ \text{monthly mortgage payment} = \frac{97000 \times 0.0058333}{1 - (1 + 0.0058333)^{-120}} \approx 1126.2522 \]

Step 4: Calculate Monthly Taxes and Insurance

The monthly costs for taxes and insurance are: \[ \text{monthly taxes} = \frac{1250}{12} \approx 104.1667 \] \[ \text{monthly insurance} = \frac{540}{12} = 45.0 \]

Step 5: Calculate Total Monthly Payment

The total monthly payment, including mortgage, taxes, and insurance, is: \[ \text{total monthly payment} = 1126.2522 + 104.1667 + 45.0 \approx 1275.42 \]

Final Answer

The total monthly payment, including taxes and insurance, is \[ \boxed{1275.42} \]

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