Discover answers to your most pressing questions at Westonci.ca, the ultimate Q&A platform that connects you with expert solutions. Experience the ease of finding quick and accurate answers to your questions from professionals on our platform. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.

The table shows the terms of a fixed-rate mortgage.

\begin{tabular}{|l|l|}
\hline
\multicolumn{1}{|c|}{Component} & \multicolumn{1}{c|}{Cost} \\
\hline
(P) Principal & [tex]$\$[/tex]200,000[tex]$ \\
\hline
(R) Monthly interest rate & $[/tex]4\%[tex]$ \\
\hline
\begin{tabular}{l}
(n) Total number of \\
monthly payments (30- \\
year term)
\end{tabular} & 360 \\
\hline
(M) Monthly payment & \\
\hline
\end{tabular}

Which accurately describes the terms of this mortgage? Check all that apply.

A. The homeowner is borrowing $[/tex]\[tex]$360,000$[/tex].
B. The monthly interest rate is 4 percent.
C. Monthly payments must be made for 30 years.
D. The annual interest rate is 4.8 percent.
E. The homeowner is borrowing [tex]$\$[/tex]200,000$.
F. Monthly payments must be made for 360 years.


Sagot :

Let's carefully analyze the terms of the fixed-rate mortgage presented in the table and determine the accuracy of each statement.

Given:
- Principal (P): \[tex]$200,000 - Monthly interest rate (R): 4% - Total number of monthly payments (n) for a 30-year term: 360 Statements: 1. The homeowner is borrowing \$[/tex]360,000.
- This statement is false as the principal amount borrowed is \[tex]$200,000, not \$[/tex]360,000.

2. The monthly interest rate is 4 percent.
- This statement is true as the given monthly interest rate in the table is 4%.

3. Monthly payments must be made for 30 years.
- This statement is true. Since the total number of monthly payments is 360, and there are 12 months in a year, this amounts to a 30-year term (30 * 12 = 360).

4. The annual interest rate is 4.8 percent.
- This statement is false. There is no information provided about the annual interest rate. Moreover, if the monthly interest rate is 4%, then the annual interest rate would likely be calculated differently (typically it would be higher because of compounding).

5. The homeowner is borrowing \[tex]$200,000. - This statement is true as it matches the principal amount provided in the table. 6. Monthly payments must be made for 360 years. - This statement is false. Monthly payments must be made for 360 months, which is equivalent to 30 years, not 360 years. Conclusion: The accurate descriptions of the terms of this mortgage are: - The monthly interest rate is 4 percent. - Monthly payments must be made for 30 years. - The homeowner is borrowing \$[/tex]200,000.

So, the correct answer would include statements 2, 3, and 5:
- The monthly interest rate is 4 percent.
- Monthly payments must be made for 30 years.
- The homeowner is borrowing \$200,000.
We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.