Loan
1. Victor earns a gross annual income of $84,482 and is buying a home for $185,500. He is making a 10% down
payment and financing the rest with a 30-year loan at 3.75% interest.

Monthly Mortgage Payment Per $1000 Borrowed
Rate 15-year 20-year 25-year 30-year
loan
loan loan
3.00% 6.906 5.546 4.742
4.216
3.25% 7.027 5.672 4.873
4.352
3.50% 7.149 5.800
5.006 4.490
3.75% 7.272 5.929 5.141
4.631
4.00% 7.397 6.060 5.278 4.774
4.25% 7.523 6.192 5.417 4.919
4.50% 7.650 6.326 5.558 5.067
4.75% 7.778 6.462 5.701 5.216
5.00% 7.908 6.600 5.846 5.368

(a) What is the mortgage amount Victor will borrow?
(b) According to the rule of thumb used in this course, can Victor afford this mortgage? Justify your
response in order to earn full credit.
(c) What will Victor's monthly mortgage payment be?
(d) What will Victor's total payment for the house be?
(e) What is the amount of interest Victor will pay?

words
p English (United States)