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? a. Peter should increase the rent by $200. b. Peter should increase the rent by $60. c. Peter should increase the rent by $10. d. Peter should keep the rent at $900.

Question

Mathematics

Danielle Carlson

6 June, 04:49

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? a. Peter should increase the rent by $200. b. Peter should increase the rent by $60. c. Peter should increase the rent by $10. d. Peter should keep the rent at $900.

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Answers (1)

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Jocelyn Gibson · Answer 1

Monthly payments for mortgage: $1,257.63

10% of monthly income: $298.50

Defecate: $959.13

Tenant fee (rent) : $900

Defecate: $59.13

Solution: To get his goal of spending 10% of his salary, Peter needs and extra $59.13, so Peter should B. increase the rent by $60