1. Business
  2. Economics
  3. 1 gary and ann have just purchased a new home...

Question: 1 gary and ann have just purchased a new home...

Question details

1. Gary and Ann have just purchased a new home. They paid $40,000 as a down payment and obtained a $200,000 mortgage to pay for the rest. The 30-year mortgage has an interest rate of 0.5% per month. How much will they pay each month in principal and interest? Your answer must be correct to the nearest penny.

2. Jerry and Katrina took out a 30-year, $360,000 mortgage on their 2800-square-foot house. The mortgage rate is 0.4% per month so their payments are $1888.80 per month. How much would they still owe on their mortgage immediately after making their 220th monthly payment?

3. Sue is planning to buy a house. She has been advised by her financial planner that her monthly house payment (which includes property taxes and insurance) should not exceed 30% of her take-home pay. Currently, her take-home pay is $2000 per month. Her monthly property taxes will be approximately $100 and her monthly homeowners insurance will be approximately $50. If Sue’s take-home pay is $2000 per month, and the mortgage is at 0.5% per month for 30 years, what is the maximum amount she can borrow to buy her house?

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution