Shauna wants to buy a house and plans to rent the apartment located in the basement for extra income. the house has a purchase price of $195,600 and she will make a 5% down payment. shauna has qualified for a 30 year mortgage with a fixed rate of 5.875%. approximately how much rent should she charge for the apartment in order to cover her monthly mortgage payment if she only wants to spend $400 a month of her own money?

a.
$300
b.
$700
c.
$1100
d.
$1150

Option B $700 is the correct answer.

Step-by-step explanation:

The total price of the house is = $195600

Shauna is paying 5% as down payment, this is =

So, amount left after down payment =

Now, Shauna will take a loan n $185820 for 30 years at 5.875% per year.

So, her monthly EMI becomes =

So, rate is 5.875/12/100 = 0.0049

n = 30*12 = 360

So, putting these values in formula we get:

= = $1099.81 ≈ $1100

Now, we have been asked, how much rent should Shauna charge, if she only wants to spend $400 a month of her own money?

So, her total monthly installment is $ 1100 and she will contribute her $400.

Money left = 1100-400 = $700.

Shauna will charge $700 as rent.

Option B is the answer.

d

step-by-step explanation: