The MacEacherns wish to buy a new house that costs $279,000. The bank charges 5.25% interest. A)  If the MacEacherns take out a 20-year mortgage, what will their monthly payment be? B) How much total interest will the MacEacherns pay if they only paid the minimum monthly payment found int part A and paid for the entire 20 years? C) If the home insurance premium for the year will be $1,224 and they will need to pay an annual property tax amount of $2,136, what is the PITI?

Q: 7. John and Yuki want to buy a three-bedroom semi-detached house that currently sells for $725900.…

A: Given: Cost of house = $725,900 Property taxes = $3,500 Down payment rate = 12%

Q: Charisma is able to pay $1250 a month for a 25-year mortgage with end of month payments. Because of…

A: It is a case of loan amortization where the monthly payment is given with a 20% down payment done…

Q: A woman buys a house for a ​$260,000. She pays ​$20,000 down and takes out a mortgage at 5.1​% for…

A: Purchase Price of House = pp = $260,000Down Payment = dp = $20,000Compound = Monthly = 12Interest…

Q: Jim has an annual income of $300,000. Jim is looking to buy a house with monthly property taxes of…

A: Here, To Find: Maximum monthly mortgage payment =?

Q: Scott & Rebecca can afford to pay $4,000.00 each month for a mortgage. Their credit union is…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

Q: Greg borrows $881,000 to buy a house. His mortgage requireds 22 years of monthly payments, with the…

A: The scenario requires identifying the amount required to be paid after the 36th monthly payment. It…

Q: Shaun and Kelsey decide they will buy a three-bedroom condo, with a $1,150,000 mortgage from Royal…

A: Shaun and Kelsey decided to mortgage = $1150000 from Royal trust Amortization = 25 years The…

Q: Janet is purchasing a new house for $315,000. Her credit union requires her to make a 20% down…

A: Using Excel PMT function

Q: Brad and Sam take a 30-year mortgage for a house that costs $126,601. Assume the following:   The…

A: PITI stands for principal, interest, tax and insurance - PITI is the sum component of all four…

Q: Craig decides to purchase a property that has been valued at $475,000. He has $80,000 available as a…

A: Value of property = $475,000Available deposit = 80,000Mortgage year = 25 yearsInterest = 2%

Q: Julie and Rex Parker plan to buy a $310,000 home, paying 20% downpayment and financing the balance…

A: The PMT function or concept can be used to determine the periodic payments required to accumulate a…

Q: Roberto and Micah plan to purchase a home for $225,000. They will pay 20% down and finance the…

A: Monthly installment = loan / cumulative PV factor Monthly installment = loan / PVAIF (0.308333%,…

Q: Fatzamata and Maggie have $30,000 for a down payment on a future house. Their budget can accomodate…

A: Given: Amount available for downpayment : $30,000 Monthly mortgage payment: $1200 The amount owed to…

Q: Gerry and Alex decide they will buy a two-bedroom garden-suite, with a $925,000 mortgage from West…

A: Loan amortization is the process of reimbursement of loan periodically by the borrower of the loan…

Q: Jino sold his house. In addition to cash, he took a mortgage on the house. The mortgage will be paid…

A: Present value is also known as a present discounted value, in which the future value of cash inflows…

Q: Susanna wants to purchase a house costing $201,277. She plans to put $44,946 toward a down payment…

A: The monthly payments can be ascertained from the present value of annuity function.

Q: grandmother’s estate in a few months’ time. He is eyeing to buy a 1-bedder condominium so that he…

A: In this problem we have to calculate monthly interest rate and present value FACTOR and from that we…

Q: Allison is considering paying $400 a year for an extended warranty on several of her major…

A: Rate of interest =2% Period =5 years  Payment =$400 per year  Future value FACTOR =(1+r)n/r Future…

Q: b) that his monthly house and property tax payment should not exceed 35% of his disposable monthly…

A: As per our policy, we only answer one question when many different questions are provided. The first…

Q: 14. Francisco Lindor borrows $73,000 at 12 percent interest toward the purchase of a mortgage is for…

A: Annual payments are periodic fixed payments that include the payment for interest and payment for…

Q: Craig decides to purchase a property that has been valued at $480,000. He has $90,000 available as a…

A: Monthly payments is the annuity amount for the loan borrowed at given interest rate and time period…

Q: Mr. Abdullah borrows $80,000 at 14 percent interest toward the purchase of a home. His mortgage is…

A: A term loan is a form of credit instrument in which money is lent to someone else in exchange for…

Q: A couple buys a $190,000home, making a down payment of 16%. The couple finances the purchase with a…

A: When the lender lends a loan to the borrower, he charges a rate of interest on the borrowed amount.…

Q: Sarah secured a bank loan of $155,000 for the purchase of a house. The mortgage is to be amortized…

A: When a loan is taken to buy a big ticket item like a house the borrower usually makes monthly…

Q: Bill and Susan bought a home for $190,000 and made a 20% down payment. They got a fixed mortgage at…

A: Computation as follows: Hence, the monthly payment is $881.54.

Q: Patty purchases a $190,000 house. She pays $50,000 down and takes out a 15-year mortgage with…

A: Mortgages A mortgage is a legal agreement between a lender and a borrower in which the borrower…

Q: Vickie decides to sell her current home and move to a larger home. She estimates that she can sell…

A: When the lender lends a loan to the borrower, he charges a rate of interest on the borrowed amount.…

Q: sky wants to purchase a new house that cost 1,440,000. The bank agrees to provide a loan to fixed…

A: We need to find monthly installment and compare that with the salary of 20000 per month. If monthly…

Q: Jenny and Leo plan to purchase a new house and the couple is able to obtain a 25-year 3.6% (per…

A: The concept of time value of money will be applied here.   The cost of the house will be the sum of…

Q: Bryce and David plan to purchase a home for $176,000. They will pay 20% down and finance the…

A: Down payment = 20% Loan (L) = 80% of $176000 = $140800 n = 15 years = 180 months r = 8.2% per annum…

Q: John has 1 mil dollars. John got a mortgage for a 1 mil dollar house bought with a 10% downpayment,…

A: Given, Prime rate at the beginning= 1.5% and annual increase= 0.25%  Therefore, interest rates for…

Q: Patty purchases a $240,000 house. She pays $40,000 down and takes out a 25 year mortgage with…

A: MortgagesA mortgage is a legal agreement between a lender and a borrower in which the borrower…

Q: Wilma wants to buy a car that costs $52,000. She has arranged to borrow the total purchase price of…

A: In this case Wilma will make fixed monthly payments. The amount of these payments will be the same…

Q: Johnny and Lucy have purchased a home for $365,000. They will need to obtain a mortgage for 85% of…

A: Loan amortization table shows the bifurcation of each monthly payment in the interest payment and…

Q: Jane Doe earns $41,400 per year and has applied for a(n) $89,000, 25-year mortgage at 7 percent…

A: Amount available for mortgage payment= Debt Service Ratio * Monthly income -  Monthly Property taxes

Q: Cindy and Rick purchased a home for $145,000 and financed it with a 30-year fixed-rate loan at 6.25%…

A: Introduction Mortgage Loan: A mortgage is a loan that a borrower takes out to buy or retain a house…

Q: Megan takes out a car loan for $13,000. She intends to make monthly payments for 5 years to pay off…

A: We take loans to make purchases for a car, house etc. The loan is repaid by making fixed periodic…

Q: Emma plans to loan $1,000 to her friend, who will pay a simple interest rate of 5.8% every year for…

A: The objective of the question is to calculate the amount of money Emma's friend will owe her after…

Q: Klipling wants to have $43257 for a down payment on a house ten years from now. She can either…

A: Future value refers to the value of a current asset at some future date affected by the interest…

Q: Jake just got a ​$96000 mortgage in order to buy a new​ home, and he was able to get a 30 year loan…

A: Loan Amount (pv) = $96,000Interest Rate (rate) = 5.5%Time Period = 30 YearsNumber of Payments in a…

Q: arnie and beth litner recently bought a house for $425,000. They put 10% down as a down payment and…

A: The answer to the given question has been provided below in a detailed manner along with all the…

Q: Bill and Kim Johnson are purchasing a house for $252,000. Their Bank requires them to pay a 20% down…

A: Amortization refers to the regular and equal repayment of loan amount over a term of the loan. This…

Q: Tom Burke bought a home in Virginia for $160,000.  He puts down 25% and obtains a mortgage for 30…

A: Home cost = $160,000 Down payment = 25%*$160,000 = $40,000 Mortgage period = 30 years  Interest rate…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.