Mathematics for Business and Personal Finance

Chapter 10: Housing Costs

Practice Tests

1
Elaine and Ronald Sumter consider purchasing a new home for $179,000. A 15% down payment is required. What is the amount of the mortgage loan needed to finance the purchase?
A)$11,933.33
B)$26,850.00
C)$152,150.00
D)$205,850.00
2
The Lawrences consider purchasing a new home for $224,000. A 10% down payment is required. What is the amount of the mortgage loan needed to finance the purchase?
A)$22,400.00
B)$171,360.00
C)$179,200.00
D)$201,600.00
3
Tracy and Allen Van Steenburgh have applied for a $100,000 loan at an annual interest rate of 6.50%. The loan is for a period of 20 years and will be paid in equal monthly payments that include interest. According to the table below, what is the total amount of interest charged?

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A)$193,440.00
B)$150,000.00
C)$79,040.00
D)$50,000.00
4
Use the table from problem 4. Cassie and Todd Bennett have applied for a $280,000 loan at a 6.5% annual interest rate. The loan is for 30 years, and the Bennett's will pay it in equal monthly payments that include interest. What is the total amount of interest charged?
A)$637,056
B)$530,880
C)$357,056
D)$250,880
5
ALGEBRA Haley and Aaron Przepiora have applied for a $170,000 loan at an annual interest rate of 4.75%. The loan is for a period of 30 years, and they will pay it in equal monthly payments that include interest. Find the monthly payment using the formula.

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p = principal, or the amount of the mortgage
r = rate per payment, the mortgage rate divided by 12
n = number of payments required to pay off the loan.
A)$2,790.12
B)$1,016.00
C)$886.80
D)$834.22
6
Lori and Percy Saunders have been granted a mortgage loan at an annual interest rate of 7% for 25 years. The home has a selling price of $129,000. They need a 15% down payment, and their bank will allow them to finance the closing costs as part of the mortgage. According to the closing costs listed below, what is the actual amount financed with the mortgage?

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A)$116,714.00
B)$109,650.00
C)$26,414.00
D)$7,064.00
7
Tiffany and Mika Oberneder have been granted a mortgage loan at an annual interest rate of 6.5% for 30 years. The home has a selling price of $225,000. They need a 15% down payment, and their bank will allow them to finance the closing costs as part of the mortgage. According to the closing costs listed below, what is the actual amount financed with the mortgage?

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A)$238,100.00
B)$229,100.00
C)$194,911.25
D)$182,873.24
8
Susan and Stephan Polanski obtained a 20-year, $95,000 mortgage loan. The interest rate is 7%. Their monthly payment is $736.25. For the first payment, what is the payment to principal?
A)$27.71
B)$182.08
C)$554.17
D)$708.54
9
Keely and Nick Jones obtained a 30-year, $275,000 mortgage loan from State Bank and Trust. The interest rate is 8%. Their monthly payment is $2,018.50. For the first payment, what is the amount of interest?
A)$1,833.33
B)$161.48
C)$1,857.02
D)$2,005.04
10
The Orange County tax assessor determined that the market value of the Schmidt's house is $132,000. The rate of assessment in Orange County is 50% of market value. The tax rate is 48.75 mills. What is the real estate tax on the Schmidt's house?
A)$32.18
B)$321.75
C)$3,217.50
D)$6,435.00
11
The Greene County tax assessor determined that the market value of the Friedman's house is $164,500. The rate of assessment in Greene County is 45% of market value. The tax rate is 42.25 mills. What is the real estate tax on the Friedman's house?
A)$3,127.56
B)$3,822.57
C)$6,950.13
D)$7,402.50
12
ALGEBRA Ana and Enrico Cesare pay $2,723.45 in annual property taxes. The rate of assessment in their tax district is 35%, and their tax rate is 38.25 mills. What is their property's market value?
A)$213,322.31
B)$203,432.31
C)$195,143.14
D)$7,815.57
13
The replacement value of the Hernandez's home is estimated at $140,000. They have insured their home for 80% of the replacement value. According to the figures below, what is the amount of coverage on the Hernandez's personal property?

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A)$112,000
B)$56,000
C)$22,400
D)$5,600
14
The replacement value of the Bonner home is estimated at $240,000. They have insured their home for 80% of the replacement value. According to the figures below, what is the amount of insurance on the Bonner's garage and other structures?

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A)$19,200
B)$38,400
C)$96,000
D)$192,000
15
The replacement value of the Sill's home is estimated at $250,000. They have insured their home for 80% of the replacement value. The home is of wood frame construction and has been rated in fire protection class 7. According to the table below, what is the annual premium?

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A)$998
B)$943
C)$850
D)$791
16
Use the table from problem 15. The replacement value of the Justin Zimmerman's home is $150,000 and he has it insured for 80% of its replacement value. The home is of brick and has been rated in fire protection class 9. What is the annual premium?
A)$821
B)$781
C)$635
D)$605
17
Max and Tabatha Klindt have a monthly combined take-home pay of $3,750. The Klindts recorded the following housing expenses for the month of August: $878.65 for mortgage payment; $52.50 for insurance; $266.67 for real estate taxes; $94.52 for electricity; $45.03 for telephone service; and $42.65 for water. How much are their housing costs over or under the FHA 35% guideline?
A)$67.52 over
B)$67.52 under
C)$2,369.98 over
D)$2,369.98 under
18
Evan Cataldo recorded his housing expenses for the month of September: mortgage payment, $456.90; insurance $62.50; taxes, $172.00; electricity, $65.70; phone service, $42.30, fuel, $43.80, water, $27.90; and repairs $221.34. His monthly gross income is $2,970. How much are Evan's housing costs over or under the FHA 35% guideline?
A)$52.94 under
B)$52.94 over
C)$86.23 under
D)$86.23 over
19
Rosa Marcos plans to rent an apartment for $650 a month. She estimates that annual expenses will be as shown. What is her average monthly cost?

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A)$1,060.17
B)$965.25
C)$650.00
D)$410.17
20
Sharon Bernstein rents an apartment for $1,110 a month. She has these annual expenses: electricity, $980; gas, $1,100; phone/cable/Internet, $2,100; insurance, $450; and lost interest $52. What are the annual expenses?
A)$20,012
B)$20,484
C)$18,002
D)$17,696
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