The Bells obtain a25-year, $110,000 conventional mortgage at a10.5% rate on a house selling for$160,000. Their monthly mortgagepayment, including principal andinterest, is$1038.60. They also pay 2 points at closing.

a. Determine the total amount the Bells will pay for their house.

The total amount the Bells will pay is: $363,780

b. How much of the cost will be interest(including the 2points)?

$313,780 of the cost will be interest.

c. How much of the first payment on the mortgage is applied to theprincipal?

$___ of the first payment is applied to the interest.

$___ of the first payment is applied to the principal.