Reference no: EM132506002

Rob and Laura wish to buy a new home. The price is $187,500 and they plan to put 20% down. New Rochelle Savings and Loan will lend them the remainder at a 10% fixed rate for 30 years, with monthly payments to begin in one month. (Ignore taxes.)

Question 1: How much will their monthly payments be?

A)$1,316.36

B)$1,325.99

C)$1,512.56

D)$1,645.45

E)$1,760.45

Question 2: Assuming they pay off the loan over the 30 year period as planned, what will the total cost (principal + interest + down payment) of the house be?

A)$187,500

B)$271,996

C)$354,234

D)$473,760

E)$511,390

Question 3: What will the outstanding balance of the loan be after ten years assuming you make the first 120 payments right on time?

A)$ 99,610

B)$135,467

C)$136,407

D)$139,144

E)$170,509

Question 4: Suppose Rob wants to pay off the loan in 15 years. How much extra must he pay each month to do so?

A)$ 11.25

B)$201.99

C)$294.95

D)$311.95

E)$314.47