Financial Algebra Ch 7 Quiz

According to financial experts, a renter should allow no more than 20% of his or her gross income for rent.

• True

• False

The McQuires pay a monthly mortgage payment of $938. They also pay a semi-annual property tax bill of $3,298 and semi-annual homeowner’s insurance of $840. The property tax and insurance are paid monthly into an escrow account to their lender. What is their monthly payment to their lender?

• $5,076.00

• $1,627.67

• $1,282.83

• $3,007.00

Gretchen is replacing the floors in a room with the shape of a regular octagon. The length of one side of the room is 15 ft and the apothem is 20 feet. What is the area of the flooring that Gretchen will be replacing?    $Area=\frac{1}{2}\left(Apothem\right)\left(Perimeter\right)$  

• 300 sqft

• 1200 sqft

• 2400 sqft

• 150 sqft

Kate and Ashton have been approved for a $200,000 15-year mortgage with an APR of 5.5%. How much of their first monthly payment will go to interest?  $I=P\left(APR\right)\left(t\right)$  

• $1,634.17

• $916.67

• $1,147.57

• $717.50

Angela receives biweekly paychecks of $2,500. The house she is considering purchasing will cost her a total of $1,100 and her total monthly expenses are $2,300. What are her front-end and back-end ratios?

• 22%, 46%

• 44%, 92%

• 49%, 44%

• 46%, 22%

Nancy is buying a house and made a list of her expenses: mortgage payments, utilities, closing costs, prepaid interest, origination fee, and insurance payments. Which payments are recurring costs? Select all that apply.

• Mortgage payments

• Closing costs

• Prepaid interest

• Origination fees

• Insurance payments

Garrett and Erin are borrowing $170,000 to purchase a new home. They have been approved for a 30-year loan with an interest rate of 5.75%. Calculate their monthly payment?  $M=\frac{P\left(\frac{APR}{12}\right)\left(1+\frac{APR}{12}\right)^{12\cdot t}}{\left(1+\frac{APR}{12}\right)^{12\cdot t}-1}$  

• $992.07

• $8,145.83

• $813.58

• $841.06

Apartments in a certain city follow a trend line given by the equation y = 1.75x + 350. Which number or variable represent the price per square foot for those apartments?

• x

• y

• 1.75

• 300

Jonathan is purchasing a home for $475,000. If he is planning to make a 15% down payment, how large of a mortgage should he apply for?

• $71,250

• $31,667

• $403,750

• $460,000

What is NOT another word for renter?

• Lessee

• Landlord

• Boarder

• Tenant