Question
You are considering the purchase of a house today for $280,000. You plan to finance the purchase with an 85% LTV mortgage over 30 years
You are considering the purchase of a house today for $280,000. You plan to finance the purchase with an 85% LTV mortgage over 30 years at an interest rate of 3.5% (no PMI will be required). You expect the appreciation rate for the property price to be 6% per year for the next three years. At the end of three years, what will be your return on the equity you paid, including the equity gained by paying down the mortgage balance?
1. How much do you owe on the mortgage after three years? Group of answer choices
A. $210,639.33
B. $223,804.29
C. $241,453.48
D. $252,042.59
E. $263,299.16
2. How much is the house worth after three years? Group of answer choices
A.$263,875
B.$283,462
C.$310,441
D. $333,484
E. $357,658
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