Question

Rob and Laura wish to buy a new home. The price is $187,500 and they plan to put 20% down. New Rochelle Savings and Loan will lend them the remainder at a 10% fixed rate for 30 years, with monthly payments to begin in one month. (Ignore taxes.)

1. How much will their monthly payments be?

A) $1,316.36

B) $1,325.99

C) $1,512.56

D) $1,645.45

E) $1,760.45

2. Assuming they pay off the loan over the 30 year period as planned, what will the total cost (principal + interest + down payment) of the house be?

A) $187,500

B) $271,996

C) $354,234

D) $473,760

E) $511,390

3. What will the outstanding balance of the loan be after ten years assuming you make the first 120 payments right on time?

A) $  99,610

B) $135,467

C) $136,407

D) $139,144

E) $170,509

4. Suppose Rob wants to pay off the loan in 15 years. How much extra must he pay each month to do so?

A) $  11.25

B) $201.99

C) $294.95

D) $311.95

E) $314.47

Answer 1

360 Equated monthly instalment = Peoncipal [ rc (aangki na 30x2 months and 101 wale (-- 207. down ) ;n=17201837. - 360 (0.8x $187, sool 0.00833 (1 +0.00 873) (1 to 1008377 360, ~ 91316.36 (4 1316.36