Managing Financial Information

Question 1

Use this example from a fixed rate mortgage calculator to help you answer the questions. Keep the page open after you complete this question.According to the calculator, the monthly payment Demarco and Tanya should anticipate paying for principal and interest is

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$669.

Question 2

$201,854$251,854✔ $274,854

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$274,854

Question 3

✔ increasestay constantdecrease

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increase

Question 4

The total monthly payment Demarco and Tanya should anticipate is

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$877.

Question 5

According to the amortization table, Demarco and Tanya will pay a total of in interest over the life of their loan. This means their total cost, including the $170,000 purchase price, is approximately .

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✔ $104,854; According to the amortization table, Demarco and Tanya will pay a total of in interest over the life of their loan.: $104,854; This means their total cost, including the $170,000 purchase price, is approximately .: $274,854

Question 6

principalinterest

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interest; According to the chart, by year 10, the majority of Demarco and Tanya’s payment will go toward the .: interest; By year 20, the majority of Demarco and Tanya’s payment will go toward the .: principal; Over time, the amount paid toward the principal will .: increase

Question 7

$208$611$819

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$611; Selection 1: $611

Question 8

$169$667$836

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$836; According to the chart, by year 5, the combined payment for principal and interest will increase to approximately .: $836; By year 15, the combined payment will increase to approximately .: 961; Recall that taxes and mortgages add about $400 to the payment for principal and interest. If Demarco and Tanya’s income stays the same, by year 10, their total payment will be 25% of their gross month: over

Question 9

$200,317$193,429$195,104

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$195,104; According to the chart, Demarco and Tanya will pay a total of in interest over the life of their loan.: $195,104; This means their total cost, including the purchase price, is approximately .: $374,323; This amount is than what they would pay in total using the fixed-rate mortgage.: higher

Question 10

$711$811$911

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$811; According to the chart, the initial monthly payment Demarco and Tanya should anticipate paying on principal and interest is .: $811; They should budget $400 for insurance and tax payments, so the total amount they should anticipate paying monthly is .: $1,211

Managing Financial Information Answers

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