Answered: The Hills obtain a 30-year, $144,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The Hills obtain a 30-year, $144,000 conventional mortgage at a 4.5% rate on a house selling for $180,000. Their monthly mortgage payment, including principal and interest, is $729.63. They also pay 2 points at closing. Determine the total amount the Hills will pay for their house over 30 years.

The total amount is

round to nearest cent

Expert Solution

Step 1

$Given :$

$\begin{array}{rcl} Loan Amount & = & $ 144000 \\ Loan Tenure & = & 30 years \\ Interest rate & = & 4.5 % \\ Down payment & = & $ 180, 000 - $ 144, 000 \\ = & $ 36000 \\ Monthly payment & = & $ 729.63 \end{array}$

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