Answer:
Option A,4 months
Explanation:
Closing fees =1.5% of the mortgage
mortgage amount is $150,000
closing fees =$150,000*1.5%=$2250
The mortgage monthly payment can be computed using the pmt formula in excel as follows:
=pmt(rate,nper,-pv,fv)
rate is the rate per month which is 3.5%/12=0.002916667
nper is 30 years multiplied by 12 =360
pv is the amount of mortgage which is $150,000
fv is the sum of the interest on mortgage and mortgage amount which is unknown
=pmt(0.002916667
,360,-150000,0)= 673.57
the final answer=closing fees/monthly payment=$2250
/$673.57 = 3.34 months
The closest option is 4 months
