You Are Purchasing a New Home and Need to Borrow

question 22

Multiple Choice

You are purchasing a new home and need to borrow $260,000 from a mortgage lender. The mortgage lender quotes you a rate of 6.80% APR for a 30-year fixed rate mortgage. The mortgage lender also tells you that if you are willing to pay two points, they can offer you a lower rate of 6.50% APR for a 30-year fixed rate mortgage. One point is equal to 1% of the loan value. So if you take the lower rate and pay the points, you will need to borrow an additional $5200 to cover points you are paying the lender. Assuming you pay the points and borrow from the mortgage lender at 6.50%, then your monthly mortgage payment (with payments made at the end of the month) will be closest to ________.

• A) $1844
• B) $1676
• C) $2011
• D) $2347

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Definitions:

Permanent Memories

Enduring memories that remain stable over time, often stored in long-term memory.

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences, including the context and emotions associated with them.

Kilobyte

A unit of digital information equal to 1024 bytes, commonly used to measure the size of small files or amounts of data.

Professional Baseball

A professional sport played by teams in leagues, notably in the United States and Japan, where it is considered a major part of the sports culture.