1. Victor earns a gross annual income of $64,570 and is buying a home for $125,340. He is making a 15% down payment and financing the rest with a 20-year loan at 3.75% interest. Monthly Mortgage Payment Per $1000 Borrowed
Rate 15-year loan 20-year loan 25-year loan 30-year loan
3.00% 6.906 5.546 4.742 4.216
3.25% 7.027 5.672 4.873 4.352
3.50% 7.149 5.800 5.006 4.490
3.75% 7.272 5.929 5.141 4.631
4.00% 7.397 6.060 5.278 4.774
4.25% 7.523 6.192 5.417 4.919
4.50% 7.650 6.326 5.558 5.067
4.75% 7.778 6.462 5.701 5.216
5.00% 7.908 6.600 5.846 5.368
(a) What is the mortgage amount he will borrow?
(b) Can he afford this mortgage? Justify your response.
(c) What will his monthly mortgage payment be?
(d) What will his total payment for the house be?
(e) What is the amount of interest he will pay?