Asked by Jennifer
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?
Answers
Answered by
Henry
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.
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.
Answered by
Henry
Correction: 100%-5% = 95% borrowed.
Answered by
Jennifer
Thank you
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