Question

5. Angela Corcoran bought a $125,000 home. She made a 12% down payment
and borrowed the rest on a 25-year, 8.8% fixed rate mortgage. Her
monthly mortgage payment was $908.10. A. How much was the down
payment Angela made? B. How much did she borrow on the mortgage? C.
What is the total amount of the monthly payments Angela expects to pay
over the life of the loan? D. What is the amount of interest Angela will
pay over the 25-year loan term?
6. The Coverley's bought a home for $162,500. They made a 5% down
payment and borrowed the rest on a 7.4%, 30-year fixed rate mortgage.
Their monthly payment was $1,068.86. A. How much was the down
payment they made? B. How much was the amount of their mortgage? C.
What was the total amount of their monthly payments over 30 years. D.
What was the amount of interest they paid over the life of the loan?

Answer 1

The details of the home bought by Angela Corcoran are:

• $15,000 down payment.
• $110,000 was borrowed.
• $272,430 is the total amount of monthly payments.
• $162,430 is the total amount of interest to be paid.

The details for the home by the Coverley's are:

• $15,000 down payment.
• $154,375 was borrowed.
• $384,789.60 is the total amount of monthly payments.
• $230,414.60 is the total amount of interest to be paid.

What are the payments for Angela Corcoran?

The down payment is:

= 12% x 125,000

= $15,000

The loan amount is:

= Cost of house - down payment

= 125,000 - 15,000

= $110,000

The total amount to be paid is:

= 908.10 per month x 12 months per year x 25 years

= $272,430

The total interest:

= Total amount paid - Cost of loan

= 272,430 - 110,000

= $162,430

What are the payments by the Coverley's?

The down payment is:

= 5% x 162,500

= $8,125

The loan amount is:

= Cost of house - down payment

= 162,500 - 8,125

= $154,375

The total amount to be paid is:

= 1,068.86 per month x 12 months per year x 30 years

= $384,789.60

The total interest:

= Total amount paid - Cost of loan

= 384,789.60 - 154,375

= $230,414.60

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