19. Joe Jay purchased a new colonial home for $260,000, putting down 20%. He dec
ID: 3421533 • Letter: 1
Question
19. Joe Jay purchased a new colonial home for $260,000, putting down 20%. He decided to use Loyal Bank for his mortgage. They were offering a 6 1/2% for a 25 year mortgage. The principal after the first payment had a balance outstanding of:
A. $207,270.95
B. $207,720.59
C. $207,720.95
D. $207,270.59
E. None of these
20. Tom Burke buys a home in Virginia for $139,000. He puts down 30% and obtains a mortgage for 25 years at 12%. The portion of the first payment that covers interest is:
A. $52.54
B. $1,025.54
C. $973.00
D. $97.30
E. None of these
22. Anne Katz, the owner of Katz Sport Shop, lends $8,000 to Shelley Slater to help her open an art shop. Shelley plans to repay Anne at the end of eight years with interest compounded semiannually at 8%. At the end of eight years, Anne will receive (use the tables in the handbook):
A. $14,984
B. $16,857
C. $16,587
D. $14,484
E None of these
Explanation / Answer
Solution(19):None of these
simple interest I=ptr/100
principal amount=$260,000,
downpayment =20%=52000
Remaining amount kept as mortgage =260000-52000=208000
interest =6.5%
time =25 years=25 * 12 =300 months(since 1 year =12 months)
Balance after 1 st principal payment($3,434)=208000-3434
= $204566
Which is not there in options so none of these.
Solution20:
Downpayment=30%=0.3=0.3*139,000
= 41700
rest principal=139000-41700=
97,300
Answer:none of these:
Year Beginning Balance Principal Interest Payment Ending Balance 1 $208,000 $3,434 $13,419 $16,853 $204,566 2 204,566 3,664 13,189 16,853 200,901 3 200,901 3,910 12,943 16,853 196,992 4 196,992 4,172 12,682 16,853 192,820 5 192,820 4,451 12,402 16,853 188,369 6 188,369 4,749 12,104 16,853 183,620 7 183,620 5,067 11,786 16,853 178,553 8 178,553 5,406 11,447 16,853 173,147 9 173,147 5,768 11,085 16,853 167,378 10 167,378 6,155 10,698 16,853 161,224 11 161,224 6,567 10,286 16,853 154,657 12 154,657 7,007 9,846 16,853 147,650 13 147,650 7,476 9,377 16,853 140,174 14 140,174 7,977 8,876 16,853 132,197 15 132,197 8,511 8,342 16,853 123,686 16 123,686 9,081 7,772 16,853 114,605 17 114,605 9,689 7,164 16,853 104,916 18 104,916 10,338 6,515 16,853 94,578 19 94,578 11,030 5,823 16,853 83,548 20 83,548 11,769 5,084 16,853 71,779 21 71,779 12,557 4,296 16,853 59,221 22 59,221 13,398 3,455 16,853 45,823 23 45,823 14,296 2,558 16,853 31,527 24 31,527 15,253 1,600 16,853 16,274 25 16,274 16,274 579 16,853 0Related Questions
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