The Young family is purchasing a $130,000 house with a VA mortgage. The bank is offering them a 25-year mortgage with an interest rate of 9.5%. They have $20,000 invested that could be used for a down payment. Since they do not need a down payment, Mr. Young wants to keep the money invested. Mrs. Young believes that they should make a down payment of $20,000. a) Determine the total cost of the house with no down payment & b) total cost, if they make a down payment of $20,000. c)Mr. Young believes that the $20,000 investment will have an annual rate of return of 10% compounded quarterly. Assuming that Mr. Young is right, calculate the value of the investment in 25 years. d) If the Young’s use the $20,000 as a down payment, their monthly payments will decrease. Determine the difference of the monthly payments in parts (a) and (b).
2007-05-06
22:35:39
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5 answers
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asked by
baby_girl_clover
1
in
Mathematics