Rob and Laura wish to buy a new home. The price is $187,500 and they plan to put 20% down. New Rochelle Savings and Loan will lend them the remainder at a 10% fixed rate for 30 years, with monthly payments to begin in one month. (Ignore taxes.)

1. How much will their monthly payments be?

A) $1,316.36

B) $1,325.99

C) $1,512.56

D) $1,645.45

E) $1,760.45

Loan amount = 187,500*0.8 = 150,000; 150,000 = PMT*113.9508; PMT = 1,316.36

2. Assuming they pay off the loan over the 30 year period as planned, what will the total cost (principal + interest + down payment) of the house be?

A) $187,500

B) $271,996

C) $354,234

D) $473,760

E) $511,390

3. What will the outstanding balance of the loan be after ten years assuming you make the first 120 payments right on time?

A) $ 99,610

B) $135,467

C) $136,407

D) $139,144

E) $170,509

choose an answer and explain why