19 Joe Jay purchased a new colonial home for 260000 putting

19. Joe Jay purchased a new colonial home for $260,000, putting down 20%. He decided to use Loyal Bank for his mortgage. They were offering a 6 1/2% for a 25 year mortgage. The principal after the first payment had a balance outstanding of:

A. $207,270.95

B. $207,720.59

C. $207,720.95

D. $207,270.59

E. None of these

20. Tom Burke buys a home in Virginia for $139,000. He puts down 30% and obtains a mortgage for 25 years at 12%. The portion of the first payment that covers interest is:

A. $52.54

B. $1,025.54

C. $973.00

D. $97.30

E. None of these

22. Anne Katz, the owner of Katz Sport Shop, lends $8,000 to Shelley Slater to help her open an art shop. Shelley plans to repay Anne at the end of eight years with interest compounded semiannually at 8%. At the end of eight years, Anne will receive (use the tables in the handbook):

A. $14,984

B. $16,857

C. $16,587

D. $14,484

E None of these

Solution(19):None of these

simple interest I=ptr/100

principal amount=$260,000,

downpayment =20%=52000

Remaining amount kept as mortgage =260000-52000=208000

interest =6.5%

time =25 years=25 * 12 =300 months(since 1 year =12 months)

Balance after 1 st principal payment($3,434)=208000-3434

= $204566

Which is not there in options so none of these.

Solution20:

Downpayment=30%=0.3=0.3*139,000

= 41700

rest principal=139000-41700=

97,300

Answer:none of these:

Year	Beginning Balance	Principal	Interest	Payment	Ending Balance
1	$208,000	$3,434	$13,419	$16,853	$204,566
2	204,566	3,664	13,189	16,853	200,901
3	200,901	3,910	12,943	16,853	196,992
4	196,992	4,172	12,682	16,853	192,820
5	192,820	4,451	12,402	16,853	188,369
6	188,369	4,749	12,104	16,853	183,620
7	183,620	5,067	11,786	16,853	178,553
8	178,553	5,406	11,447	16,853	173,147
9	173,147	5,768	11,085	16,853	167,378
10	167,378	6,155	10,698	16,853	161,224
11	161,224	6,567	10,286	16,853	154,657
12	154,657	7,007	9,846	16,853	147,650
13	147,650	7,476	9,377	16,853	140,174
14	140,174	7,977	8,876	16,853	132,197
15	132,197	8,511	8,342	16,853	123,686
16	123,686	9,081	7,772	16,853	114,605
17	114,605	9,689	7,164	16,853	104,916
18	104,916	10,338	6,515	16,853	94,578
19	94,578	11,030	5,823	16,853	83,548
20	83,548	11,769	5,084	16,853	71,779
21	71,779	12,557	4,296	16,853	59,221
22	59,221	13,398	3,455	16,853	45,823
23	45,823	14,296	2,558	16,853	31,527
24	31,527	15,253	1,600	16,853	16,274
25	16,274	16,274	579	16,853	0

19. Joe Jay purchased a new colonial home for $260,000, putting down 20%. He decided to use Loyal Bank for his mortgage. They were offering a 6 1/2% for a 25 ye

19 Joe Jay purchased a new colonial home for 260000 putting

Solution

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