David is purchasing a home for $613,000. He makes a 10% down payment and obtains a 15-year fixed rate mortgage loan at 7% annual interest. His monthly payments are $4,958.84. He pays an intangible tax of 0.3%. Which of the following is the total cost of principal, interest, down payment, and intangible tax?

$894,246.30

$892,591.20

$955,730.20

$955,546.30

Question

David is purchasing a home for $613,000. He makes a 10% down payment and obtains a 15-year fixed rate mortgage loan at 7% annual interest. His monthly payments are $4,958.84. He pays an intangible tax of 0.3%. Which of the following is the total cost of principal, interest, down payment, and intangible tax?

 $894,246.30

 $892,591.20

 $955,730.20

 $955,546.30

anonymous · Answer

OK, 10% of 61300 = 61300.
I'm guessing that interest is included in the monthly payments so you can disregard the 7% and multiply 4958.84 x 12 months x 15 years = 892591.20.

Now, the 0.3% tax is applied to the total 613,000 purchase, so 613000 x (0.3/100)= 1839

So 61300 + 892591.2 (total of principal and interest) + 1839 =   955730.20

anonymous · Answer

Sorry the first line of the above should read 10% of 613,000 = 61,300.

anonymous · Answer

@Julian101 thanks alot !

anonymous · Answer

No problem, I was scratching my head at the wording there, because when I crunched 7% interest out on that principal amount I got a number way higher than the ones listed. The key to the question is in the wording I think, as the interest is already factored into the monthly payment amount. Anyway, glad it helped.