Find the best solutions to your questions at Westonci.ca, the premier Q&A platform with a community of knowledgeable experts. Discover in-depth solutions to your questions from a wide range of experts on our user-friendly Q&A platform. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.
Sagot :
Answer:
(a) The mortgage amount she will borrow is $180,400
(b) Yes she can
(c) Her monthly payment will be approximately $914.06
(d) Her total repayment is approximately $329,061.6
(e) The amount of interest is approximately $148,661.6
Step-by-step explanation:
The details of the transactions are;
The gross annual income Victoria earns = $124,482
The cost price of the home she is buying, C = $225,500
The amount she is making as down payment = 20%
The duration the loan she id financing the rest with, t = 30-years
The interest rate on the loan, r = 4.5%
(a) The mortgage amount she will borrow, 'P', is the cost of the home less the down payment
The down payment = 20% of the cost of the home
∴ The down payment = (20/100) × $225,500 = $45,100
∴ P = $225,500 - $45,100 = $180,400
The mortgage amount she will borrow, P = $180,400
(b) Using the 2× to 2.5× gross income rule, we have;
2 × her annual income = 2 × 124,482 = 248,964
∴ 2 × her annual income > The mortgage = 180,400
She can afford the mortgage
(c) The monthly fixed payment for the mortgage is given as follows;
[tex]M = P \times \dfrac{r}{n} \times \dfrac{\left(1+ \dfrac{r}{n} \right)^{n \cdot t}}{\left[\left(1 + \dfrac{r}{n} \right)^{n\cdot t} - 1\right]}[/tex]
Where;
n = The number of periods per year = 12 monthly periods per year
180,400*0.045*(1 + 0.045)^(30)/((1 + 0.045)^(30) - 1)
[tex]M = 180,400 \times \dfrac{0.045 }{12} \times \dfrac{\left(1+\dfrac{0.045 }{12}\right)^{30 \times 12}}{\left[\left(1 + \dfrac{0.045 }{12}\right)^{30 \times 12} - 1\right]} \approx 914.060298926[/tex]
Her monthly payment will be M ≈ $914.06
(d) The total repayment is given as follows;
n × t × M
∴ 12 × 30 × 914.06 = 329061.6
The total payment for the house = $329,061.6
(e) The amount of interest = The total payment - The principal loan amount
∴ The amount of interest = $329061.6 - $180,400 = $148,661.6
We appreciate your time on our site. Don't hesitate to return whenever you have more questions or need further clarification. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.
