To save the down payment, Mary deposited monthly in a savings account earning 2.5% compounded monthly. If it took Mary 5 years to save up the down payment,how much money was Mary depositing each month? 2. If Mary and George don't want to spend more than 15% of theirmonthly income on their house payment, what is the maximum monthly payment they can afford?
Mary's job position is being transferred to Lexington, Kentucky from Orlando, Florida. She andher husband George are currently renting their home in Orlando, but they have decided that they want to purchase a home in Lexington. Mary's annual salary is $48,500. George has also beenable to find employment in Lexington at a factory making $39,000 per year. Mary is a planner and has saved $6200 that she can use towards the down payment on the new house. Use the above information to answer the following questions. Round all answers to 2 decimal places.
1. To save the down payment, Mary deposited monthly in a savings account earning 2.5% compounded monthly. If it took Mary 5 years to save up the down payment,how much money was Mary depositing each month?
2. If Mary and George don't want to spend more than 15% of theirmonthly income on their house payment, what is the maximum monthly payment they can afford?
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Mary has found a beautiful home on Richmond Rd. that she loves.The price of the home is $285,000. If Mary and George qualify for a30-year loan at a fixed interest rate of 3.99%, can they afford thehome? (Hint: Don't forget about the down payment!)
4. Mary and George finally decide on a 3 bedroom home on ManchesterCt. The price of the home is $188,000.
a) What is the total amount the couple will have to finance?
b) If the couple purchases the home on a 30-year loan at a fixedinterest rate of 3.99%, what will be their monthly payment?
c) What is the total cost of the home using the 30-year loan.(Hint: Don't forget to include the down payment!)
d) How much of the total cost is interest?
e) Mary's friend, Beth, suggests they check into a 15 year loan and comparethe monthly payments and the overall cost of the home. If Mary andGeorge purchase the home on a 15-year loan with a fixed interest rate of3.99%, what with be their monthly payment?
f) What is the total cost of the home using the 15-year loan?(Hint: Don't forget to include the down payment!)
g) How much of the total cost is interest?
h) Should Mary and George purchase the home using the 30-year or 15-yearloan? Justify your answer.
by Bartleby ExpertMary has found a beautiful home on Richmond Rd. that she loves.The price of the home is $285,000. If Mary and George qualify for a30-year loan at a fixed interest rate of 3.99%, can they afford thehome? (Hint: Don't forget about the down payment!)
by Bartleby Expert
