For the Fixed-Rate Mortgage Below, Determine the Net Initial Monthly

question 204

Multiple Choice

For the fixed-rate mortgage below, determine the net initial monthly cost (taking tax savings into consideration) . Round your answer to the nearest dollar. $$\begin{array} { l l } \text { Amount of mortgage: } & \$ 147,000 \\\text { Term of mortgage: } & 30 \text { years } \\\text { Interest rate: } & 8 \% \\\text { Annual property tax: } & \$ 1110 \\\text { Annual insurance: } & \$ 570 \\\text { Owner's income tax bracket: } & 40 \%\end{array}$$

• A)$790
• B)$818
• C)$750
• D)$771

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Definitions:

Novation

The act of replacing an existing contract with a new one, where a different party assumes the rights and obligations of the original party.

Accord

An agreement in contract law where one party agrees to accept something different (often less) than what was initially agreed upon as satisfactory performance.

Satisfaction

The fulfilment of a requirement, obligation, or the to fulfillment of a condition stipulated in a contract.

Deviated Specifications

Instances where the actual specifications of a product or service differ from the initially agreed or standard specifications.