Suppose That You Want to Purchase a Home for $400,000 }">$\text { cellpadding="0" cellspacing="0" align="center" width=" } 99 \% \text { " border="1"> }$

Multiple Choice

Suppose that you want to purchase a home for $400,000 with a 30-year mortgage at 6% interest. Suppose that you can put 30% down. Use the table and determine the amount of the down payment, the amount to be financed, the monthly payments, the total amount of interest, and the necessary monthly income for you to be able to afford this loan. }">$\text { cellpadding="0" cellspacing="0" align="center" width=" } 99 \% \text { " border="1"> }$

$\text { Monthly Cost to Finance } \$ 1,000$

$\begin{array}{lcccc} & {\text { Number of Years Financed }} \\\text { Rate of } & 5 \text { Years } & 10 \text { Years } & 20 \text { Years } & 30 \text { Years } \\\text { Interest } & \mathrm{N}=60 & \mathrm{~N}=120 & \mathrm{~N}=240 & \mathrm{~N}=360 \\6.0 \% & 19.33 & 11.10 & 7.16 & 6.00 \\7.0 \% & 19.80 & 11.61 & 7.75 & 6.65 \\8.0 \% & 20.28 & 12.13 & 8.36 & 7.34 \\9.0 \% & 20.76 & 12.67 & 9.00 & 8.05 \\10.0 \% & 21.25 & 13.22 & 9.65 & 8.78 \\11.0 \% & 21.74 & 13.77 & 10.32 & 9.52 \\12.0 \% & 22.24 & 14.35 & 11.01 & 10.29\end{array}$

A) down payment=$120,000; financed=$520,000; monthly payments=$3,120.00; total interest=$603,200; monthly income=$6,986.67
B) down payment=$120,000; financed=$400,000; monthly payments=$2,400.00; total interest=$464,000; monthly income=$6,666.67
C) down payment=$120,000; financed=$280,000; monthly payments=$1,680.00; total interest=$324,800; monthly income=$4,666.67
D) down payment=$120,000; financed=$280,000; monthly payments=$1,680.00; total interest=$324,800; monthly income=$6,346.67
E) down payment=$120,000; financed=$520,000; monthly payments=$3,120.00; total interest=$603,200; monthly income=$8,666.67