Suppose That You Want to Purchase a Home for $400,000 }">$\text { cellpadding="0" cellspacing="0" align="center" width=" } 99 \% \text { " border="1"> }$

question 103

Multiple Choice

Suppose that you want to purchase a home for $400,000 with a 30-year mortgage at 6% interest. Suppose that you can put 30% down. Use the table and determine the amount of the down payment, the amount to be financed, the monthly payments, the total amount of interest, and the necessary monthly income for you to be able to afford this loan. }">$\text { cellpadding="0" cellspacing="0" align="center" width=" } 99 \% \text { " border="1"> }$

$\text { Monthly Cost to Finance } \$ 1,000$

$\begin{array}{lcccc} & {\text { Number of Years Financed }} \\\text { Rate of } & 5 \text { Years } & 10 \text { Years } & 20 \text { Years } & 30 \text { Years } \\\text { Interest } & \mathrm{N}=60 & \mathrm{~N}=120 & \mathrm{~N}=240 & \mathrm{~N}=360 \\6.0 \% & 19.33 & 11.10 & 7.16 & 6.00 \\7.0 \% & 19.80 & 11.61 & 7.75 & 6.65 \\8.0 \% & 20.28 & 12.13 & 8.36 & 7.34 \\9.0 \% & 20.76 & 12.67 & 9.00 & 8.05 \\10.0 \% & 21.25 & 13.22 & 9.65 & 8.78 \\11.0 \% & 21.74 & 13.77 & 10.32 & 9.52 \\12.0 \% & 22.24 & 14.35 & 11.01 & 10.29\end{array}$

• A) down payment=$120,000; financed=$520,000; monthly payments=$3,120.00; total interest=$603,200; monthly income=$6,986.67
• B) down payment=$120,000; financed=$400,000; monthly payments=$2,400.00; total interest=$464,000; monthly income=$6,666.67
• C) down payment=$120,000; financed=$280,000; monthly payments=$1,680.00; total interest=$324,800; monthly income=$4,666.67
• D) down payment=$120,000; financed=$280,000; monthly payments=$1,680.00; total interest=$324,800; monthly income=$6,346.67
• E) down payment=$120,000; financed=$520,000; monthly payments=$3,120.00; total interest=$603,200; monthly income=$8,666.67

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Definitions:

C.O.D. Contract

Contract of "Cash On Delivery" where payment for goods is made at the time of delivery rather than in advance.

Privity of Contract

A legal concept that restricts the parties who can sue or be sued under a contract to those who are a part of the contract agreement.

Consumer Transactions

Business dealings or trade between sellers and individuals who are purchasing for personal, family, or household use.

Sale of Goods Act

Legislation regulating the sale of goods, ensuring standards for transactions, the quality of goods, and the rights of buyers and sellers.