(a) How much does she need for the down payment? How much money does Maria need to borrow? (b) What will Maria's monthly mortgage payments be? Be mindful of how much she actually needs to borrow! (c) How much interest will Maria pay over 30 years?

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
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1.Maria takes out a 30-year mortgage at 4.5% to buy a house that costs $250,000. She must have a down payment of 2% of the purchase price.

(a) How much does she need for the down payment? How much money does Maria need to borrow?

(b) What will Maria's monthly mortgage payments be? Be mindful of how much she actually needs to borrow!

(c) How much interest will Maria pay over 30 years?

(d) Maria could instead choose a 15-year mortgage at 4.5%. Discuss the pros and cons of this choice.

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(d) Maria could instead choose a 15-year mortgage at 4.5%. Discuss the pros and cons of this choice

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