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​Annie's mortgage statement shows a total payment of ​$651.34 with ​$575.32 paid toward principal and interest...

​Annie's mortgage statement shows a total payment of ​$651.34 with ​$575.32 paid toward principal and interest and ​$76.02 paid for taxes and insurance. Taxes and insurance for three months were collected at closing.​ Now, after six months of​ payments, she is curious about the total in her escrow account. Calculate the amount​ for, her and explain the account. Calculate the amount for her and explain the account.

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Expert Solution

Solution:

An escrow account is a special reserve account, which is used to accumulate the annual property tax payments and homeowners insurance premiums for the home owner.

An escrow account shows the balance as follows:

Three months at closing is (3 × $76.02) = $228.06

For 6 months (6 × $76.02) = $456.12

Total amount in escrow account = $684.18

jeff jeffy answered 2 years ago
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