1. Penny and Ernest want to purchase a new home for $150,000. Their combined income is $58,000, and they will make a down payment of $48,000. Taxes on the house are $1,800 per year and the heating cost is $1,300 annually. The house includes condo fees of $500. The couples other debt payments are $623 per month for their car loan and their student loan. In order to keep payments low, the mortgage will be amortized over 25 years. The interest rate on a 5-year mortgage term is 6%. What is their monthly mortgage payment?

Select one:

a. $725.85

b. $726.58

c. $652.60

d. $716.58

e. $715.68

2.

Referring to question 4, what is Penny and Ernest's gross debt service ratio (GDSR)?

Select one:

a. 24.02%

b. 18.50%

c. 19.83%

d. 10.42%

e. 31.39%

3.

Referring to question 4, assume Penny and Ernest lose this deal and want to know the maximum amount of money they can borrow. If the bank's maximum TDSR is 40%, what is the largest payment they can handle? Hint:determine the maximum monthly mortgage payment using the TDSR formula and the information provided in question 4.

Select one:

a. $1,860.66

b. $552.00

c. $1,068.66

d. $1,680.66

e. $802.00