The Emerson First National Bank is lending you money to buy a new car. The loan agreement will probably state that you must carr
2 answers:
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Answer:
- <em><u>$869,776</u></em>
Explanation:
<u>1. Mortgage table</u>
Find attached a sample of a mortgage table per 1,000 dollars borrowed.
You have to use the number in the intersection of the row for 5.25% interest and the column for 20 years.
The number is $6.74.
That means that, for every $1,000 borrowed for 20 years at 5.25% interest you will pay $6.74 every month.
<u>2. Amount borrowed</u>
You will make a 22% down payment:
Thus the amount borrowed is $426,000 - $93,720 = $332,280
<u>3. Monthly payment</u>
Multiply the monthly payment per 1,000 by the amount borrowed divided by 1,000:
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<u>4. Total monthly payments:</u>
Multiply the number of payments by the monthly payment.
Number of payments = 20 years × 12 payments /year = 240 payments.
<u>5. Total payment for the home.</u>
The total payment for the home will be the down payment plus the amount paid to the bank:
- $322,280 + $537,496 = $869,776
