You Need a Loan of $100,000 to Buy a Condo $1 : 30$

question 74

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 $4.5 \%$ with closing costs of $\$ 1308$ and no points Choice 2: 20-year fixed rate at $4 \%$ with closing costs of $\$ 1308$ and 4 points

• A) Choice 1: \(\$ 510.04 ; \$ 1308\)
• Choice 2: \$609.07; \$5058
• B) Choice 1: \(\$ 506.69 ; \$ 1308\)
• Choice 2: \$605.98; \$5308
• C) Choice 1: \(\$ 496.67 ; \$ 1308\)
• Choice 2: \$595.94; \$5108
• D) Choice 1: \(\$ 516.61 ; \$ 1308\)
• Choice 2: \$615.99; \$2616

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Definitions:

Marginal Revenue

The extra income a business earns by selling an additional unit of a product or service.

Profit-maximizing Firm

A business entity that aims to achieve the highest possible profit through its operations and decision-making, focusing on optimizing revenue and minimizing costs.

Marginal Revenue

The gain in income associated with the sale of one extra unit of a good or service.

Price Searcher

A seller that has the ability to influence the price of its product due to lack of competition or the nature of the product.