BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Inez has to pay 4 percent in closing costs and 16 percent for the down payment on a purchase of $225, 500 with an ARM. Over the life of the loan, she will pay $262, 072.72. What is the total cost of her house?
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$307, 172.72
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$302, 771.72
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$301, 217.72
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Explanation:
Detailed explanation-1: -Down payment is calculated using the formula: down payment = down payment percent times purchase price. The down payment percent needs to be converted into a decimal for this calculation.
Detailed explanation-2: -Thus, closing costs include all expenses and fees charged by lenders and third parties, such as the broker and government, when the buyer gains ownership of a property. Closing costs may be one-time payments like brokerage or payments that recur on account of ownership such as home insurance.
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