Adrian Is a Single Man and Wants to Save Up

question 43

Multiple Choice

Adrian is a single man and wants to save up enough money to put as a down payment on a new house in 5 years. He has read that the best way to purchase a house is with a 20% down payment. He has a large income and very little debt right now so he can afford to save a substantial amount of money every month. He is asking you for some advice to help him reach his goal.
-It is now 5 years later and Adrian has saved up enough money to make a 20% downpayment on a new house. He will have to borrow $135,000 at an annual rate 6% for 30 years, compounded monthly. What will his monthly mortgage payment be?

• A) $1,199.55
• B) $809.39
• C) $779.98
• D) $397.50

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Definitions:

Demand Schedule

A chart displaying the amount of a product or service that buyers are prepared and capable of buying at different price levels.

Marginal Cost

The cost added by producing one additional unit of a product or service, a key factor in economic decision-making.

Demand Schedule

is a table that lists the quantity of a good that consumers are willing to buy at different price levels, showing the relationship between price and quantity demanded.

Marginal Cost

The cost of producing one additional unit of a product, reflecting changes in variable cost as output is adjusted.