Topic Test Answers

Two friends decide to rent an apartment and split the cost evenly. They each paid $575 towards the total move in cost of first and last month's rent and a security deposit. If the apartment cost $325 per month to rent, how much was the security deposit?

Chloe lives in an area where she runs the air conditioner during the 4 hottest months of the year. The air conditioner runs for 7 hours per day at a cost of 21 cents per hour. How much does she spend per year on utility bills for the air conditioner?(Assume there are 30 days in each month)

Peter wants to buy a duplex with a purchase price of $226,950. Peter can afford a 10% down payment. Peter earns $2,985 a month and wants to spend no more than 10% of his income on his mortgage payment. Peter is going to rent out the other half of the duplex. He thinks that if he charges $900 a month in rent this will cover the remainder of his mortgage payment. Given that Peter has a 30 year mortgage with a fixed rate of 6.25%, how should Peter adjust how much he charges for rent of the other half of the duplex?

The Hendersons have just bought a home that requires some monthly yard maintenance. They are trying to decide if they should hire a professional lawn care service to maintain the property or do it themselves. Below are the costs associated with both options:Professional Service OptionDo-It-Yourself Option$75 for the first month$250 lawnmower $45 per month after initial visit$135 edgerIncludes mowing and edging the lawn, trimming the bushes, and raking the leaves.$69 hedge trimmer $25 rakeHow long would it take before the Hendersons would recover their costs if they chose to do it themselves over the professional service?

Giselle wants to buy a condo that has a purchase price of $163,000. Giselle earns $2,986 a month and wants to spend no more than 25% of her income on her mortgage payment. She has saved up $33,000 for a down payment. Giselle is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%. What modification can be made to this loan to make it a viable option, given Giselle’s situation?

Which of the following is not an advantage of renting?

Without buying points, a monthly mortgage payment will be $958. Buying 1 point at closing would reduce the payment to $948.75. If each point costs $1000.00, rounded to the nearest year, how long would it take to break even by buying 1 point?

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with a monthly income of $4,850.

A couple is required by their lender to have a down payment of 20% of the purchase price of the home they want to buy. If the couple has saved $35,000, what is the most expensive home the couple can afford to buy?

Which of the following statements are true about WaterSense toilets?

Marco leaves the bathroom faucet running for 22 minutes while he gets ready in the morning. Running the faucet for 5 minutes wastes the same amount of energy as leaving a 60-watt light bulb on for 14 hours. How much energy did Marco waste, in terms of hours which a 60-watt light bulb would remain on?

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with an annual income of $86,250.

Ronnie wants to lower his utility bills to save money on his monthly expenses. He discovers that if he replaces his water heater with a solar water heater his monthly utility bills can decrease around 50% to 85%. At the end of the year Ronnie wants to calculate the percentage his new solar water heater saved him in the utility bills compared to last year. Ronnie's total utility expenses for this year are $862.40 and last year the utility expenses were $1935.67. What percentage did Ronnie save on his utlility bills by switching to a solar water heater?

How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $380?

Zahra is anxious to save money on her utility bills and knows that changing the temperature of the water when she does laundry can help save money. Right now three-fourths of all her laundry is done with the hotter water. Use the table below to determine how much she currently pays in utility costs for laundry. Assume 1 load of wash per day. Clothes washer w/electric water heaterCost per loadHot wash & warm rinse71 cents per loadWarm wash & cold rinse25 cents per loadIf she cuts down the amount of laundry that she does in hot water to one-half, about how much will she save every year?

If the purchase price for a house is $445,500, what is the monthly payment if you put 5% down for a 30 year loan with a fixed rate of 6.25%?

The Picketts have lived in their house for about 13 years. They like to keep a well-maintained property and have noticed that the paint on the exterior of their house is starting to peel. They get two bids for painting services from two different contractors. Based on the fee schedule below, which option would be the cheapest and by how much?Handyman’s Paint ServicePainting Plus Service$2250 all supplies and labor included for a 2-day jobTwo day job estimate $300 preparation work $765 labor per day $225 paint and supplies

Using the standard 28/36 guidelines, if the maximum monthly mortgage payment allowed for someone applying for a home loan is $1,085, what is their annual income?

The national average utility cost is $270.48 per month. If the average phone bill is 12.6% of the total amount and the average utility cost for Dallas is $326, what would be the cost of a typical Dallas home phone bill?

A lender estimates the closing costs on a home loan of $50,000 as listed below. Closing Cost Charge Loan origination $200 Title insurance $530 Attorney’s fees $600 Appraisal $265 Inspection $575 Recording fees $130 Escrow $800 If the lender's good faith estimates are accurate, are they a reasonable amount for closing costs? Why or why not?