A House Sells for $260,000 and a 20% Down Payment $\$ 1000$

question 10

Essay

A house sells for $260,000 and a 20% down payment is made. A 15-year mortgage at 8% was obtained. (i) Find the down payment.
(ii) Find the amount of the mortgage.
(iii) Find the monthly payment.
(iv) Find the total interest paid.

Monthly Payment per $\$ 1000$ of Mortgage
(Includes Principle and Interest)
$\quad$ $\quad$ $\quad$ $\quad$$\text { Number of years }$
$\begin{array}{c|c|c}\text { Rate }(\%) & 15 & 30 \\\hline 6.5 & \$ 8.71 & \$ 6.32 \\7 & \$ 8.99 & \$ 6.65 \\7.5 & \$ 9.28 & \$ 6.99 \\8 & \$ 9.56 & \$ 7.34\end{array}$

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where the quantity supplied equals the quantity demanded.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded.

Constant Cost Industry

An industry in which the costs of production, including the prices of inputs, do not change as the total output of the industry changes.

Total Cost

The complete cost of production, including both fixed and variable costs.