Chapter 7 & 8
In an attempt to have funds for a down payment in seven years, James Dupont plans to save $3,800 a year for the next seven years. With an interest rate of 5 percent, what amount will James have available for a down payment after the seven years? Use Exhibit 1-B.
Future value down payment $30,939.60
Most tenants sign a lease. Which of the following is part of a lease agreement?
The conditions under which the landlord may enter the apartment.
Ricky has a conventional mortgage. He can monitor the reduction of his loan balance through his payments by using _____ information.
amortization
Which of the following expenses is NOT usually incurred by a tenant?
Property taxes.
Kelly and Tim Jarowski plan to refinance their mortgage to obtain a lower interest rate. They will reduce their mortgage payments by $57 a month. Their closing costs for refinancing will be $1,740. How long will it take them to cover the cost of refinancing?
31 Months
Based on Exhibit 7-7, what would be the monthly mortgage payments for each of the following situations?
A $157,500, 30-year loan at 7 percent.$1,047.38 $215,500, 15-year loan at 5.5 percent.$1,760.64 A $196,500, 15-year loan at 7 percent.$1,766.54
Amber had permission from Bradley to borrow his car to run some errands. Unfortunately, while Amber was driving, she looked down to change songs on her iPod and sideswiped a car and hit a bicyclist. Based on her experience, which of the following would be true?
Amber's insurance policy should cover any property damage claims since she was driving Bradley's car with his permission.
For each of the following situations, what amount would the insurance company pay?
Insurance payment = Claim amount - Deductible
An insurance company will
Insure pure risk, but not speculative risk.
Which mortgage would result in higher total payments? Mortgage A:$1,085 a month for 30 years. Mortgage B:$980 a month for 3 years and $1,176 a month for 27 years.
Mortgage B
Private mortgage insurance
Must be terminated automatically when the homeowner's equity reaches 22% of the property value at the time the mortgage was executed.
Barbara left a skateboard on her front steps. Her neighbor tripped on the skateboard and was injured. The fact that Barbara didn't put away the skateboard is called
Negligence.
During the closing for a home purchase, you will normally do which of the following?
Pay all closing costs, settle last-minute details, and sign documents
When Carolina's house burned down, she lost household items worth a total of $90,000. Her house was insured for $190,000, and her homeowner's policy provided coverage for personal belongings up to 60 percent of the insured value of the house.
Personal property coverage=Building coverage × Personal property coverage percent =$190,000 × 0.60 =$114,000 Yes
Condominiums usually require a monthly fee for various services. At $240 a month, how much would a homeowner pay over a period of 10 years for living in this housing facility?
Total fee=Monthly fee × 12 × Number of years =$240 × 12 × 10 =$28,800