You Need a Loan of $100,000 to Buy a Condo $4.25 \%$

question 81

Multiple Choice

You need a loan of $100,000 to buy a condo. Calculate your monthly payments and total closing costs for each choice.
-Choice 1: 30 -year fixed rate at $4.25 \%$ with closing costs of $\$ 1137$ and 1 points Choice 2: 20-year fixed rate at $3.75 \%$ with closing costs of $\$ 1137$ and 3 points

• A) Choice 1: \(\$ 491.94 ; \$ 2137\)
• Choice 2: \$592.89; \$4137
• B) Choice 1: \(\$ 497.36\); \$2137
• Choice 2: \(\$ 602.49\); \(\$ 4137\)
• C) Choice 1: \(\$ 481.74 ; \$ 2137\)
• Choice 2: \$542.26; \$1137
• D) Choice 1: \(\$ 501.43 ; \$ 2937\)
• Choice 2: \(\$ 463.16\); \(\$ 4937\)

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Definitions:

Overdue

The state of being delayed beyond the expected or usual time.

Consideration

Something of value exchanged between parties in a contract that binds them to the agreement, can be in the form of money, services, or goods.

Financial Intermediary

is an institution that acts as the middleman between investors and firms, facilitating investments and financial transactions.

Holder-in-due-course Status

A legal status that provides a holder of a negotiable instrument certain rights, free from many defenses and claims that could be asserted against the original party.