Question

Inez has to pay 4 percent in closing costs and 16 percent for the down payment on a purchase of $225,500 with an ARM. Over the life of the loan, she will pay $262,072.72. What is the total cost of her house? A. $307,172.72 B. $302,771.72 C. $301,217.72

Answer 1

Answer:

A. $307,172.72

Step-by-step explanation:

First we calculate closing cost and down payment for the purchase. We are given their respective percentages as 4% and 16%.

Closing Cost = 4% of 225,500

Closing Cost = 4/100 *225,500

Closing Cost = 9,020

Down Payment = 16% of 225,500

Down Payment = 16/100 * 225,500

Down Payment = 36,080

Therefore, total amount required to pay for closing cost and down payment is $45,100 (36,080 + 9,020)

As mentioned in the question, she will pay $262,072.72 over the life of the loan.

Hence the total cost of her house is

$262,072.72 + $45,100 = $307,172.72

Answer 2

Answer:

A. $307,172.72

Step-by-step explanation:

Inez has to pay 4 percent in closing costs and 16 percent for the down payment on a purchase of $225,500 with an ARM.

4% + 16% = 20%

lnez has to pay 20% of $225,500

= 225,500*20/100

= 225,500*0.2

= $45100

lnez has to pay $45100.

Over the life of the loan, lnez will pay $262,072.72

Now we have to add down payment, closing cost and the payment over the life of the loan.

$45100 + $262,072.72

= $307,172.72

Answer: A. $307,172.72

Thank you.