Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thumbs up if all parts are answered thanks You've decided to buy a house that is valued at $1 million. You have $350,000 to use

Thumbs up if all parts are answered thanks
image text in transcribed
You've decided to buy a house that is valued at $1 million. You have $350,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $650,000 mortgage, and is offering a standard 30-year mortgage at a 9% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be month. (Note: Round the final value of any interest rate used to four decimal places.) per Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a ot of money on interest. If your bank approves a 15-year, $650,000 loan"at a fixed nominal interest rate of 9% APR), then the difference in the monthly payment of the 15-year mortgage and 30-year mortgage will be ? (Note: Round the final value of any interest rate used to four decimal places.) t is likely that you won't like the prospect of paying more money each month, but if you do take out a 15-year mortgage, you will make far fewer payments and will pay a lot less in interest. How much more total interest will you ay over the life of the loan if you take out a 30-year mortgage instead of a 15-year mortgage? O $696,126.60 $821,429.39 $960,654.71 O $891,042.05 Vhich of the following statements is not true about mortgages? O Mortgages are examples of amortized loans. O The ending balance of an amortized loan contract will be zero. O If the payment is less than the interest due, the ending balance of the loan will decrease. O Every payment made toward an amortized loan consists of two parts-interest and repayment of principal

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Commodity Finance Principles And Practice

Authors: Weixin Huang

1st Edition

1781371938, 978-1781371930

More Books

Students also viewed these Finance questions

Question

Question Can a Roth IRA invest in stock of the IRA owners business?

Answered: 1 week ago