Business Math: Ch. 15 Homework

Joe Levi bought a home in Arlington, Texas, for $140,000. He put down 20% and obtained a mortgage for 30 years at 712%. What is the difference in interest cost if he had obtained a mortgage rate of 512%? (Use Table 15.1.) (Do not round intermediate calculations. Round your answer to the nearest cent.)

Difference $53,222.40

Sharon Fox decided to buy a home in Marblehead, Massachusetts, for $275,000. Her bank requires a 30% down payment. Sue Willis, an attorney, has notified Sharon that besides the 30% down payment there will be the following additional costs: (Use Table 15.1.). Recording of the deed: $30.00 A credit and appraisal report: 155.00 Preparation of appropriate documents: 48.00 Other closing expenses include a transfer tax of 1.8% of the purchase price and a loan origination fee of 2.5% of the mortgage amount. Assume a 30-year mortgage at a rate of 10%. a. What is the initial amount of cash Sharon will need? (Do not round intermediate calculations. Round your answer to the nearest cent.) b. What is her monthly payment? (Do not round intermediate calculations. Round your answer to the nearest cent.) c. What is the total cost of interest over the life of the mortgage? (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.)

Initial amount: $92,495.50 Monthly payment: $1690.15 Total cost of interest: $415,954

CNBC.com reported mortgage applications dropped in March 2015 due to an increase in the rate on 30-year fixed rate mortgages to an average of 4.01%. Dennis Natali wants to purchase a vacation home for $235,000 with 20% down. Calculate his monthly payment for a 20-year mortgage at 3.5%. Calculate total interest. (Use Table 15.1.) (Do not round intermediate calculations. Round your final answers to the nearest cent.)

Monthly payment $1,090.40 Total interest $73,696

Oprah Winfrey has closed on a 42-acre estate near Santa Barbara, California, for $50,000,000. If Oprah puts 20% down and finances at 7% for 30 years, what would her monthly payment be? (Use Table 15.1.) (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

Monthly payment $266,400

Mike Jones bought a new split-level home for $150,000 with 20% down. He decided to use Victory Bank for his mortgage. They were offering 1334% for 25-year mortgages. Provide Mike with an amortization schedule for two periods. (Use Table 15.1(b)). (Do not round intermediate calculations. Round your answers to the nearest cent.) Payment number: 1/2 Interest: $/$ Principle: $/$ Balance of loan outstanding: $/$

Payment number: 1/2 Interest: $1,375/$1,374.46 Principle: $47.00/$47.54 Balance of loan outstanding: $119,953/$119,905.46

Rick Rueta purchased a $90,000 home at 9% for 30 years with a down payment of $20,000. His annual real estate tax is $1,800 along with an annual insurance premium of $960. Rick's bank requires that his monthly payment include an escrow deposit for the tax and insurance. What is the total payment each month for Rick? (Use Table 15.1.) (Round your answer to the nearest cent.)

Total monthly payment: $793.50

Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $50,000. Assuming that she puts 20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? (Use the Table 15.1(a) and Table 15.1(b)). (Do not round intermediate calculations. Round your answers to the nearest cent.) (Monthly payment & Total cost of interest) a. 25 years,11.5% b. 25 years,12.5% c. 25 years,13.5% d. 25 Years, 15% e. What is the savings in interest cost between 11.5% and 15%? (Round your answer to the nearest dollar amount.) f. If Harriet uses 30 years instead of 25 for both 11.5% and 15%, what is the difference in interest? (Use 360 days a year. Round your answer to the nearest dollar amount.)

a. $406.80/$82,040 b. $436.40/$90,920 c. $466.40/$99,920 d. $512.40/$113,720 e. Interest cost $31,680 f. Interest difference: $39,456

Joe Levi bought a home in Arlington, Texas, for $140,000. He put down 20% and obtained a mortgage for 30 years at 512%. (Use Table 15.1.) a. What is Joe's monthly payment? (Do not round intermediate calculations. Round your answer to the nearest cent.) b. What is the total interest cost of the loan? (Use 360 days a year. Do not round intermediate calculations. Round your answer to the nearest cent.)

a. Monthly payment $636.16 b. Total interest cost $117,017.60

Mortgage Bankers Association reported the median price of a home sold in the United States in January 2015 was $199,600. Pat Radigan wants to purchase a new home for $305,500. Pat puts 20% down and will finance the remainder of the purchase. Compare the following two mortgage options he has: 10 years at 3.5% or 15 years at 5%. (Use Table 15.1). (Round your intermediate calculations and final answers to the nearest cent.) a. Calculate Pat's monthly payment for both the 10 and 15 year mortgage? b. Calculate Pat's total cost of interest for both the 10 and 15 year mortgage? c. What is the difference in interest paid between 10 and 15 year mortgage?

a. Monthly payment for 10 year mortgage: $2,417.12 Monthly payment for 15 year mortgage: $1,933.20 b. Total cost of interest for 10 year mortgage: $45,654.40 Total cost of interest for 15 year mortgage: $103,576 c. Difference $57,921.60

Daniel and Jan agreed to pay $560,000 for a four-bedroom colonial home in Waltham, Massachusetts, with a $60,000 down payment. They have a 30-year mortgage at a fixed rate of 6.00%. (Use Table 15.1) a. How much is their monthly payment? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) b. After the first payment, what would be the balance of the principal? (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

a. Monthly payment: $3,000 b. Payment number: 1 Interest: $2,500 Principle: $500 Balance of loan outstanding: $499,500