Question 1

A $104,000 selling price with $24,000 down at 8 1/2% for 25 years results in a monthly payment of:

Accepted Answer

A) $644.80 
B) $645.60 
C) $546.06 
D) $654.60 
E) None of these 
A) $644.80 
B) $645.60 
C) $546.06 
D) $654.60 
E) None of these

Question 2

With a mortgage of $100,000 at 7% for 15 years, prepare a one-month amortization schedule. What is the balance after the first month's payment?

Accepted Answer

$100,000 / $1,000 = 100; 100 ×

Question 3

Mindy bought a home for $249,500 with a down payment of $30,000. Her rate of interest is 6.5% for 35 years. Calculate her monthly payment by using the table lookup.

Accepted Answer

$1,327.98
$249,500 -

Question 4

With a selling price $150,000, a 20% down payment, and a mortgage at 13% for 25 years, calculate:
A. Amount of mortgage
B. Monthly payment
C. Interest portion of first payment
D. Principal portion of first payment

Accepted Answer

A. $120,00

Question 5

With a selling price $88,000, a down payment of $24,000, and a mortgage at 13% for 30 years, calculate:
A. Principal
B. Payments per $1,000
C. Monthly mortgage payment

Accepted Answer

A: $88,000 - $24,000 = $64,00

Question 6

A point is 1% of the amount of the loan.

Accepted Answer

A) True 
 B)False

Question 7

Angie Roy took out an $80,000 mortgage on a ski chalet in Vermont. The bank charged 3 points at closing. What did the points cost Angie at closing?

Accepted Answer

$80,000 ×

Question 8

Ben Brown bought a home for $225,000. He put down 20%. The mortgage is at 6 1/2% for 30 years. Using the table in the handbook, his monthly payment is:

Accepted Answer

A) $1,319.04 
B) $1,319.40 
C) $1,216.80 
D) $1,139.40 
E) None of these 
A) $1,319.04 
B) $1,319.40 
C) $1,216.80 
D) $1,139.40 
E) None of these

Question 9

With a selling price $140,000, a 20% down payment, and interest at 10 ½% for 25 years, calculate:
A. Amount of mortgage
B. Monthly payment
C. Interest portion of first payment
D. Principal portion of first payment

Accepted Answer

A. $112,00

Question 10

All mortgage payments must be paid:

Accepted Answer

A) Weekly 
B) Monthly 
C) Biweekly 
D) Semiannually 
E) None of these 
A) Weekly 
B) Monthly 
C) Biweekly 
D) Semiannually 
E) None of these

Question 11

The total cost of interest is equal to the total of all monthly payments:

Accepted Answer

A) Divided by amount of mortgage 
B) Minus amount of mortgage 
C) Plus amount of mortgage 
D) Times amount of mortgage 
E) None of these 
A) Divided by amount of mortgage 
B) Minus amount of mortgage 
C) Plus amount of mortgage 
D) Times amount of mortgage 
E) None of these

Question 12

A mortgage of $80,000 with 2 points means the borrower would have to pay at closing $800.

Accepted Answer

A) True 
 B)False

Question 13

A condo in Orange Beach, Alabama, is listed for $1.4 million with 20% down and financing at 5% for 30 years. What would the monthly payment be?

Accepted Answer

A) $7,518 
B) $6,014.40 
C) $6,041.20 
D) $7,815.00 
E) None of these 
A) $7,518 
B) $6,014.40 
C) $6,041.20 
D) $7,815.00 
E) None of these

Question 14

Marvin Bass bought a home for $180,000, putting down $50,000. The rate of interest is 14% for 25 years. Calculate the total cost of interest for Marvin Bass.

Accepted Answer

$180,000 - $50,000 = $130,000;

Question 15

Jill Diamond bought a home for $190,000 with a down payment of $65,000. The rate of interest was 7% for 35 years. Her monthly mortgage payment is:

Accepted Answer

A) $843.75 
B) $834.57 
C) $798.75 
D) $978.57 
E) None of these 
A) $843.75 
B) $834.57 
C) $798.75 
D) $978.57 
E) None of these

Question 16

The reduction of principal each month is equal to the payment minus the interest.

Accepted Answer

A) True 
 B)False

Question 17

A condo is advertised in The Wall Street Journal for $350,000. It states in the ad that a 20% down payment is required. The rate of interest is 11% on a 25-year mortgage. What would be (A)the monthly payment and (B)the total cost of interest?

Accepted Answer

A. $2,746.

Question 18

Interest rates on mortgages do not vary from bank to bank.

Accepted Answer

A) True 
 B)False

Question 19

Interest is equal to principal times rate divided by time.

Accepted Answer

A) True 
 B)False

Question 20

Stu Reese has a $150,000 7 1/2% mortgage. His monthly payment is $1,010.10. His first payment will reduce the principal to an outstanding balance of:

Accepted Answer

A) $149,729.40 
B) $149,927.40 
C) $72.60 
D) $149,910.40 
E) None of these 
A) $149,729.40 
B) $149,927.40 
C) $72.60 
D) $149,910.40 
E) None of these

Exam 15: The Cost of Home Ownership

A $104,000 selling price with $24,000 down at 8 1/2% for 25 years results in a monthly payment of:

With a mortgage of $100,000 at 7% for 15 years, prepare a one-month amortization schedule. What is the balance after the first month's payment?

Mindy bought a home for $249,500 with a down payment of $30,000. Her rate of interest is 6.5% for 35 years. Calculate her monthly payment by using the table lookup.

With a selling price $150,000, a 20% down payment, and a mortgage at 13% for 25 years, calculate: A. Amount of mortgage B. Monthly payment C. Interest portion of first payment D. Principal portion of first payment

With a selling price $88,000, a down payment of $24,000, and a mortgage at 13% for 30 years, calculate: A. Principal B. Payments per $1,000 C. Monthly mortgage payment

A point is 1% of the amount of the loan.

Angie Roy took out an $80,000 mortgage on a ski chalet in Vermont. The bank charged 3 points at closing. What did the points cost Angie at closing?

Ben Brown bought a home for $225,000. He put down 20%. The mortgage is at 6 1/2% for 30 years. Using the table in the handbook, his monthly payment is:

With a selling price $140,000, a 20% down payment, and interest at 10 ½% for 25 years, calculate: A. Amount of mortgage B. Monthly payment C. Interest portion of first payment D. Principal portion of first payment

All mortgage payments must be paid:

The total cost of interest is equal to the total of all monthly payments:

A mortgage of $80,000 with 2 points means the borrower would have to pay at closing $800.

A condo in Orange Beach, Alabama, is listed for $1.4 million with 20% down and financing at 5% for 30 years. What would the monthly payment be?

Marvin Bass bought a home for $180,000, putting down $50,000. The rate of interest is 14% for 25 years. Calculate the total cost of interest for Marvin Bass.

Jill Diamond bought a home for $190,000 with a down payment of $65,000. The rate of interest was 7% for 35 years. Her monthly mortgage payment is:

The reduction of principal each month is equal to the payment minus the interest.

A condo is advertised in The Wall Street Journal for $350,000. It states in the ad that a 20% down payment is required. The rate of interest is 11% on a 25-year mortgage. What would be (A)the monthly payment and (B)the total cost of interest?

Interest rates on mortgages do not vary from bank to bank.

Interest is equal to principal times rate divided by time.

Stu Reese has a $150,000 7 1/2% mortgage. His monthly payment is $1,010.10. His first payment will reduce the principal to an outstanding balance of:

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