Question

8. Drew is purchasing a home for $452,000. He makes a 20% down payment and obtains a 30-year fixed rate mortgage loan at 6% annual interest. His monthly payments are $2167.98. He pays an intangible tax of 0.2%.

Which of the following is the total cost of principal, interest, down payment, and amount of intangible tax? (4 points)

$780,472.80
$781,196.00
$871,596.00
$871,776.80

Answer 1

The total cost of principal, interest, down payment, and amount of intangible tax is $871,596.00.

Total cost of principal

Down payment:

Down payment=452,000×0.2

Down payment=90,400

Principal:

Principal=452,000−90,400

Principal=361,600

Total interest

30years=30×12months=360months

Total interest=($2167.98×360)−361,600

Total interest=$780,472.80-$361,600

Total interest=$418,872.80

Intangible tax:

Intangible tax=$361,600×0.002

Intangible tax=$723.2

Total cost of principal, interest, down payment, and intangible tax:

=$90,400+$361,600+$418,872.80+$723.2

=$871,596.00

Inconclusion the total cost of principal, interest, down payment, and amount of intangible tax is $871,596.00.

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