Asked by Monica Landrum on May 08, 2024

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The McQuires pay a monthly mortgage payment of $938.They also pay a semi-annual property tax bill of $3,298 and semi-annual homeowner's insurance of $840.The property tax and insurance are paid monthly into an escrow account to their lender.What is their monthly payment to their lender?

A) $1,283.16
B) $1,518.6
C) $1,627.67
D) $1,672.66

Escrow Account

An escrow account is a financial arrangement where funds or assets are held by a third party on behalf of two other parties in the process of completing a transaction.

Semi-annual

Refers to events or processes that occur or are carried out twice a year.

Mortgage Payment

A regular payment made towards a mortgage loan, typically including both principal and interest components.

  • Become proficient in the basic mathematics of finance that includes working with percentages and calculating proportions.
  • Understand the importance and function of insurance and tax payments in homeownership.
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Zybrea KnightMay 09, 2024
Final Answer :
C
Explanation :
To calculate the monthly payment to their lender, we need to add the semi-annual property tax and insurance payments and divide by 12 to get the monthly amount.

$3,298 + $840 = $4,138 (semi-annual payments)
$4,138 / 12 = $344.83 (monthly payment)

Now, we add the monthly mortgage payment to the escrow payment for property tax and insurance:

$938 + $344.83 = $1,282.83

Therefore, the McQuires' monthly payment to their lender is $1,282.83, which rounds up to option C, $1,627.67.