Unit 9 Review (Financial Math)

House prices in the neighborhood average at $90.05 per square foot. If the house has 1055 square feet, what should be its price?

• $124,000

• $109,000

• $95,000

• $139,750

Based on the housing data shown, which equation can be used to calculate fair housing prices?

• y = 0.074 + 50.48x

• y = 0.074x + 50.48

• y = 0.074x - 50.48

• y = 0.074 - 50.48x

A seller has a house that is 2000 square feet. The neighborhood comps show the line of best fit to be y = 0.074x + 50.48. What is a fair price for this house?

• $205.88

• $206,000

• $176,000

• $199,000

Kimberly is considering buying her first home. The house she is interested in buying is priced at $159,000. Kimberly qualifies for a 30-year mortgage at 4.75%. What will be her monthly mortgage payment?

• $702.34

• $644.19

• $751.55

• $829.42

Marcos can afford a $750 monthly mortgage payment. If the current mortgage rates are 5% and he wants a 30-year mortgage, what is the maximum amount he can afford to borrow?

• $136,280

• $137,653

• $136,000

• $139,711

A number calculated by an independent party which represents the current market rate as calculated using various factors is called a ​ (a)   ?

• index
• factor
• rate
• amortization

You are considering a 3/5 ARM. What does the 5 represent?

• The total number of years in the loan.

• The interest rate of the initial, fixed-rate loan period.

• The number of years that a fixed interest rate will be applied to the loan.

• The number of years between adjustments in the interest rate.

Vernon has obtained a $105,000, 5/1 30-year ARM at 5%. During the first 3 years, he has an option of paying interest only. If he accepts this offer, what would be his initial payment?

Hint - set FV as the negative of PV and calculate PMT.

• $437.50

• $756.92

• $587.50

• $563.66

Michael took out an 80/20 mortgage on a $109,000 home. What is the amount financed under the first mortgage?

• $87,200

• $21,800

• $109,000

• $125,000

Robert took out an 80/20 mortgage to buy a $100,000 house. The first (80%) mortgage has an interest rate of 4.75%, and the second (20%) mortgage has an interest rate of 7.525%. Both mortgages are 30-year fixed-rate mortgages. What is the total mortgage payment for this house?

• $557.51

• $417.32

• $439.87

• $140.19