The Fritzes are buying a house that sells for $163,000. The bank is requiring a minimum down payment of 15%. To obtain a 20-year mortgage at 6.5% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 15% down payment. c) Find the cost of 4 points on the mortgage

The Fritzes are buying a house that sells for $163,000. The bank is requiring a minimum down payment of 15%. To obtain a 20-year mortgage at 6.5% interest, they must pay 4 points at the time of closing. a) Determine the required down payment. b) Determine the amount of the mortgage on the property with the 15% down payment. c) Find the cost of 4 points on the mortgage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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Question

The Fritzes are buying a house that sells for

$163,000.

The bank is requiring a minimum down payment of

15%.

To obtain a

20-year

mortgage at

6.5%

interest, they must pay

points at the time of closing.

a) Determine the required down payment.

b) Determine the amount of the mortgage on the property with the

15%

down payment.

c) Find the cost of

points on the mortgage.

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