1. 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? (b) How much will Maria's monthly mortgage payments be? (c) How much interest will Maria pay over 30 years? What percentage of the total cost of the mortgage is the interest? (d) Maria could instead choose a 15-year fixed rate mortgage at 4.5%. Calculate her monthly payments and total interest paid with this option and compare these results to the answers you gave in (b). Assume she is still putting 20% down. (e) Calculate the future value of the two options below. Which option below gives her more wealth in 30 years? Ontion 1. Got tbe 20v

1. 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? (b) How much will Maria's monthly mortgage payments be? (c) How much interest will Maria pay over 30 years? What percentage of the total cost of the mortgage is the interest? (d) Maria could instead choose a 15-year fixed rate mortgage at 4.5%. Calculate her monthly payments and total interest paid with this option and compare these results to the answers you gave in (b). Assume she is still putting 20% down. (e) Calculate the future value of the two options below. Which option below gives her more wealth in 30 years? Ontion 1. Got tbe 20v

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter8: Taxation Of Individuals

Section: Chapter Questions

Problem 38P

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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?
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