Chapter 7, Lessons1, 3, and 4 Review

Chris took out a $236,000, 30-year mortgage at an APR of 5.66%. Ryan took out a $241,000, 25-year mortgage at an APR of 5.35%. Which of the following statements is NOT true?

• Chris's monthly payment is $1,363.76.

• Ryan's monthly payment is $1,345.78.

• Chris's total interest charges after 30 years are about $255,000.

• Ryan's total interest charges after 25 years are about $163,000.

Kristen has a gross bimonthly income of $5,470. She pays 15% in federal and state taxes. She puts 9% of her income to pay off her school loan and puts 5.5% of her income into her savings account. She is considering an apartment for $700 per month for rent. Does this monthly rental fee fall within the recommended 25 - 30% expense range?

• No, the monthly rental fee is above 30% of her income.

• No, the monthly rental fee is below 25% of her income.

• Yes, the monthly rental fee is about 13% of her income.

• Yes, the monthly rental fee is about 27% of her income.

The square footage and monthly rental price of 20 similar two-bedroom apartments in Pacific Marina yield the following linear regression equation: y = 1.421x + 774.60, where x represents the square footage of the apartment and y represents the monthly price. What would the monthly rent be for an apartment that has 1,850 square feet?

Jack is taking out a $263,000 mortgage. The bank offers an APR of 4.21%. He wants to compare monthly payments on 20- and 30- year mortgages. What is the difference in the monthly payments for these two mortgages? (Round answer to the nearest unit).

A bank requires that the Donaldson's pay their homeowner’s insurance, property taxes, and
mortgage in one monthly payment to the bank. If their monthly mortgage payment is $1,711.22,
their semi-annual property tax bill is $3,239, and their annual homeowner’s insurance bill is
$980, how much do they pay the bank each month?

The assessed value of the Kreiner family’s house is $457,000. The annual property tax rate is 2.66% of assessed value. What is the annual property tax on the Kreiner’s home?

How much will be charged in prepaid interest on a $500,000 loan with an APR of 3.725% that was closed on August 26? First payment is due on September 1st.

Del is buying a $250,000 home. He has been approved for a 3.75% mortgage. He was required to make a 20% down payment and will be closing on the house on July 15. His first mortgage payment is due on August 1. How much should he expect to pay in prepaid interest at the closing?

Conan is moving into a two-bedroom apartment in Valley Oaks. The monthly rent is $2,000. His up-front fees are shown. how much can he expect to pay up front for his apartment?

Application Fee - 3% of one month's rent.

Credit Application Fee - $20.

Security Deposit - 1 month's rent and last month's rent.

Broker's Fee - 14% of year's rent.

• $7,380

• $7,360

• $7,440

• $4,000

Ricky took out a $268,000, 30-year mortgage at an APR of 4.34%.

a) What is the monthly payment to the nearest cent?

b) What will be his total interest charges after 30 years, to the nearest dollar?

• $1,332.56

• $479,722

• $969.27

• $211,722