A house costs $289,000. With a 5% down payment, 2 points due at closing, and the rest financed for 25 years at 6.0% fixed interest, what is the total cost of the house?

Answer 1

100% - 5% = 95% Down payment.

Po = 0.95 * $289,000 = $274,550.=Amount
of loan.

P = (Po*r*t)/(1-(1+r)^-t)

r = (6%/12)/100% = 0.005=Monthly % rate.

t = 25yrs. * 12mo./yr. = 300 months.

Plug the above values into the given Eq
and get: P = $530,678.85 = Total cost of
the house.

2 Points = 2% of Po.

Answer 2

Correction: 100%-5% = 95% borrowed.

Answer 3

Thank you