If the purchase price for a house is $445,500, what is the monthly payment if you put 5% down for a 30 year loan with a fixed rate of 6.25%?

A 5% down payment is $445,500 × 0.05 = $22,275, so the loan principal is $445,500 − $22,275 = $423,225. For a 30-year fixed loan, there are 360 monthly payments, and the monthly interest rate is 0.0625 ÷ 12. Using the standard mortgage payment formula gives a payment of about $2,605.87 per month, which matches choice B.

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