1) Jane and John have found a house, which owing to a depressed real estate market costs only $201,500. They will put $22,000 down and finance the remainder with a 30 year mortgage loan 4.65% compounded monthly. How much will their monthly loan payment be?

How much interest will they pay in the second payment?

They will also have the following expenses: property taxes of $2,100, homeowner's insurance of $1,625, and $290 mortgage insurance (in case on of them dies before the loan is repaid, a requirement from the bank).

These annual amounts are paid in 12 installments and are added to the loan payment. What will their full monthly cost be?

If they can afford $1200 a month, can they afford the house?