Maria takes out a 30-year fixed rate mortgage at 5% to buy a house that costs $450,000. To avoid paying mortgage insurance, she needs to put 20% of the purchase price as a down payment. (a) How much does she need for the down payment? How much money does Maria need to borrow?
Maria takes out a 30-year fixed rate mortgage at 5% to buy a house that costs $450,000. To avoid paying mortgage insurance, she needs to put 20% of the purchase price as a down payment. (a) How much does she need for the down payment? How much money does Maria need to borrow?
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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Maria takes out a 30-year fixed rate mortgage at 5% to buy a house that costs $450,000. To avoid paying mortgage insurance, she needs to put 20% of the purchase price as a down payment.
(a) How much does she need for the down payment? How much money does Maria need to borrow?
Expert Solution
Step 1
Given:
Years = 30
Fixed interest rate = 5%
Cost = $450,000
Down payment = 20%
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