You Put 20% Down on a Home with a Purchase

question 63

Multiple Choice

You put 20% down on a home with a purchase price of $250,000.The down payment is thus $50,000,leaving a balance owed of $200,000.A bank will loan you this remaining balance at 3.91% APR.You will make monthly end-of-the-period payments with a 30-year payment schedule.What is the monthly annuity payment under this schedule?

• A)$944.48
• B)$830.53
• C)$941.41
• D)$5,250.18

---

Definitions:

Operating Cost

The expenses associated with running a business's core operations on a day-to-day basis.

Investment

The allocation of resources, such as capital or time, in expectation of generating future returns.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, taking into account its risk level.

Target Cost

The desired cost of a product as determined by its expected selling price minus desired profit, aimed to ensure competitiveness and profitability.