If the premium was .94% on a $150,000 loan, what is the monthly cost of PMI?

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Multiple Choice

If the premium was .94% on a $150,000 loan, what is the monthly cost of PMI?

Explanation:
PMI is charged as an annual rate on the loan amount, then divided into 12 monthly payments. With a 0.94% annual rate on a $150,000 loan: the annual premium is 150,000 × 0.0094 = 1,410. Divide by 12 to get the monthly cost: 1,410 ÷ 12 = 117.50. So the monthly PMI is $117.50.

PMI is charged as an annual rate on the loan amount, then divided into 12 monthly payments. With a 0.94% annual rate on a $150,000 loan: the annual premium is 150,000 × 0.0094 = 1,410. Divide by 12 to get the monthly cost: 1,410 ÷ 12 = 117.50. So the monthly PMI is $117.50.

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