Question

Use the following to answer questions 2-3. You have decided to purchase your first house. You have saved $50,000 to use as a down payment. The house costs $350,000. The bank is offering a 30-year mortgage with an interest rate of 7% per year.

2. What will your monthly payments be? (Round to the nearest whole dollar). A) $1,214 B) $1,996 C) $2,329 D) $3,080

3. After working on your budget, you decide that you cannot afford a payment of more than $1,500 per month. How much can you spend on a house? *Don't forget to about your down payment when determining the maximum sales price! A) $175,461 B) $225,461 C) $275,461 D) $300,461

4. You want to endow a scholarship that will pay $10,000 per year forever, starting one year from now. If the school's endowment discount rate is 7%, what amount must you donate to endow the scholarship? (Round to the nearest dollar). A) $9,346 B) $70,000 C) $142.857 D) $700,000

Answer 1

2)

3)