Mortgages — Unit test Answers

You have just applied, and have been approved for a $175,000 mortgage. The rate quoted to you by the lender is 5.5% for a 30 year fixed mortgage. Use the provided table to determine how much of your first month’s payment goes towards the principal.

Charles is going to purchase a new car that has a list price of $21,450. He is planning on trading in his good-condition 2004 Dodge Neon and financing the rest of the cost over three years, paying monthly. His finance plan has an interest rate of 12.28%, compounded monthly. Charles will also be responsible for 6.88% sales tax, a $1,089 vehicle registration fee, and a $124 documentation fee. If the dealer gives Charles 80% of the listed trade-in price on his car, once the financing is paid off, what percent of the total amount paid will the interest be? (Consider the trade-in to be a reduction in the amount paid.) Dodge Cars in Good ConditionModel/Year20042005200620072008Viper$7,068$7,225$7,626$7,901$8,116Neon$6,591$6,777$6,822$7,191$7,440Intrepid$8,285$8,579$8,699$9,030$9,121Dakota$7,578$7,763$7,945$8,313$8,581

The following table shows a portion of a three-year amortization schedule. Use the information in the table to decide which of the following statements is true.

Two friends decide to rent an apartment and split the cost evenly. They each paid $575 towards the total move in cost of first and last month's rent and a security deposit. If the apartment cost $325 per month to rent, how much was the security deposit?

The Academy for Academic Excellence has just announced their winner for the most successful student in mathematics. This student will receive a grant for their college education as well as national recognition for academic excellence in the field of mathematics. The grant will cover $12,177.17 of the cost of school per year for 5 years. If the initial amount is invested into an account over the five years, paying an annual interest rate of 5.5%, and you are to withdraw from this account until the remaining balance after the 5 years is zero dollars, determine the initial amount of the grant. Round your answer to the nearest dollar.

Jennifer is leasing a car from a local auto retailer. The terms of the lease include a 9% interest rate for 36 months with a residual value of 57%. The MSRP for the car Jennifer is leasing is $17,500. What will Jennifer’s monthly lease payment be?

Using technology, determine the quarterly payment on a 4 year loan of $16,231 at 5.1% compounded quarterly. Round your answer to the nearest cent.

Which of the following is not an advantage of renting?

Kim-Su found an apartment that she wants to rent. The rent is $715 per month and there is a security deposit of $465. To move in, Kim-Su must have first month's rent, last month's rent and the security deposit. How much does Kim-Su need to move in?

Len and three of his friends decide to rent a house and split the cost evenly. They each paid $725 towards the total move-in cost of first month's rent, last month's rent, and a security deposit. If rent is $800 per month, how much was the security deposit?

Bernie has decided to purchase a new car with a list price of $18,575. Sales tax in Bernie’s state is 7.40%, and he will be responsible for a $795 vehicle registration fee and a $110 documentation fee. Bernie plans to trade in his existing car, a 1999 Buick Riviera in good condition, and finance the rest of the cost for five years at an interest rate of 12.77%, compounded monthly. Assuming that the dealer gives Bernie the listed trade-in price for his car, what will his monthly payment be? Round all dollar values to the nearest cent.Buick Cars in Good ConditionModel/Year19981999200020012002Century$929$1,086$1,150$1,488$1,595LeSabre$2,075$2,282$2,690$2,935$3,374Regal$1,676$1,794$2,030$2,214$2,566Riviera$1,291$1,455$1,520$1,814$1,959

When purchasing her new car, Molly traded in her previous car, which was a Buick in good condition. The dealer offered her 80% of the listed trade-in value for her car, giving her a total of $1,340.80. What was Molly’s previous car?Buick Cars in Good ConditionModel/Year19981999200020012002Century$929$1,086$1,150$1,488$1,595LeSabre$2,075$2,282$2,690$2,935$3,374Regal$1,676$1,794$2,030$2,214$2,566Riviera$1,291$1,455$1,520$1,814$1,959

Tim needs a new car while he attends college in the United States for the next three years. The car he would like has an MSRP of $15,000. A local dealer can get him a three-year loan with a 7% interest rate if Tim can make a $1,500 down payment. The same dealer offers the same car for lease with a money factor of 0.00271 and a residual value of 75%. The lease requires an additional fee of $1,250 to cover Tim's security deposit and the acquisition and documentation fees for the car. Tim is looking to drive the car home with the smallest monthly payment. Which of the following statements is true?

Mika wants to buy a condominium. He has the choice of buying it now or renting it with the option to buy at the end of 3 years. If he buys now, he could put $0 down, but he must pay closing costs of $7,100. His monthly mortgage payment will be $675. Mika decides to rent instead of buy because it is the cheapest option over the first 3 years. His move-in costs are one month's rent and a $750 security deposit, and he would still need to pay his first month's rent on top of these move-in costs. To the nearest dollar, what is the maximum amount of monthly rent payment he could pay?

Why is the APR considered the most important factor to be mindful of in a car loan?

The following table shows the first two years of a three-year amortization schedule. Use the information in the table to decide which of the following statements is true.

Viola has to relocate for her job. She finds a townhome with an option to rent or buy. The conditions of each are shown below. Rent: Move-in costs of $2,380 and monthly payment of $845. Buy: Move-in costs of $5,260 and monthly payment of $785. Viola moves frequently due to her job, but she thinks that she will stay in the area for 4 years. Therefore, she decided to buy. Choose the best evaluation of Viola’s decision.

Determine the money factor for a lease with an interest rate of 9%.

A couple gets financing for 80% of the $150,000 purchase price of a house at the rate of 6% on the monthly unpaid balance. Use the table provided to find the total amount paid to the finance company if the loan is repaid in 40 years.

Using technology, determine the present value given that you make quarterly payments of $1,635 at 4.2% compouded quarterly over a 3 year period. Round your answer to the nearest cent.