Real Estate Math

A buyer pays $325,000 for a home and puts 10% down. The lender charges PMI at 0.8% of the loan amount per year. What is the monthly PMI premium?

A$162.50
B$195.00✓ Correct
C$216.67
D$243.75

Explanation

Loan amount = $325,000 × 90% = $292,500. Annual PMI = 0.8% × $292,500 = $2,340. Monthly PMI = $2,340 ÷ 12 = $195.

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