Hector and Maria purchase their first home for $138,000. They make a 10% downpayment and finance the remaining balance for 30 years at 6.5% annual interest.Calculate the amount of principal they will owe after their first two payments ofprincipal and interest. (Use a formula for MMP)Find the loan-to-value ratio for a home appraised at $640,000 that the buyer willpurchase for $655,000. The buyer plans to make a down payment of $160,000.Find Cameron's housing ratio if his PITI is $1,831.31 and his gross monthly incomeif $6,521.Find Selina's debt to income ratio if her fixed monthly expenses are $1,625 andher gross monthly income is $4,811.1.2.3.4.

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Hector and Maria purchase their first home for $138,000. They make a 10% down payment and finance the remaining balance for 30 years at 6.5% annual interest. Calculate the amount of principal they will owe after their first two payments of principal and interest. (Use a formula for MMP)

Hector and Maria purchase their first home for $138,000. They make a 10% down payment and finance the remaining balance for 30 years at 6.5% annual interest. Calculate the amount of principal they will owe after their first two payments of principal and interest. (Use a formula for MMP)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Hector and Maria purchase their first home for $138,000. They make a 10% down
payment and finance the remaining balance for 30 years at 6.5% annual interest.
Calculate the amount of principal they will owe after their first two payments of
principal and interest. (Use a formula for MMP)
Find the loan-to-value ratio for a home appraised at $640,000 that the buyer will
purchase for $655,000. The buyer plans to make a down payment of $160,000.
Find Cameron's housing ratio if his PITI is $1,831.31 and his gross monthly income
if $6,521.
Find Selina's debt to income ratio if her fixed monthly expenses are $1,625 and
her gross monthly income is $4,811.
1.
2.
3.
4.

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