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Questions and Answers
What is the value of the house that the doctor buys?
What is the value of the house that the doctor buys?
- $380,000 (correct)
- $250,000
- $572,022
- $125,000
How much money does the doctor put down as a down payment?
How much money does the doctor put down as a down payment?
- $250,000
- $57,202.20
- $125,000 (correct)
- $380,000
What is the interest rate on the mortgage?
What is the interest rate on the mortgage?
- 6.75%
- 5.50%
- 8.00%
- 7.50% (correct)
How many years will the mortgage be repaid over?
How many years will the mortgage be repaid over?
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How much debt does the doctor pay off in the first year?
How much debt does the doctor pay off in the first year?
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Study Notes
Mortgage Loan Scenario
- A doctor purchases a house worth $380,000 with a $125,000 down payment and a $250,000 mortgage loan.
- The mortgage has an annual interest rate of 7.50% (compounded monthly).
- The loan is to be repaid over 20 years in monthly installments.
- In the first year, the doctor pays off $5,720.22 of the debt.
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Description
A doctor buys a house and takes out a mortgage loan. Calculate how much of the debt the doctor pays off in the first year.
