the table shows the terms of a fixed - rate mortgage. which accurately describes the terms of this mortgage…

the table shows the terms of a fixed - rate mortgage. which accurately describes the terms of this mortgage? check all that apply. component cost (p) principal $200,000 (r) monthly interest rate 4% (n) total number of monthly payments (30 - year term) 360 (m) monthly payment the homeowner is borrowing $360,000. the monthly interest rate is 4 percent. monthly payments must be made for 30 years. the annual interest rate is 4.8 percent. the homeowner is borrowing $200,000. monthly payments must be made for 360 years.

the table shows the terms of a fixed - rate mortgage. which accurately describes the terms of this mortgage? check all that apply. component cost (p) principal $200,000 (r) monthly interest rate 4% (n) total number of monthly payments (30 - year term) 360 (m) monthly payment the homeowner is borrowing $360,000. the monthly interest rate is 4 percent. monthly payments must be made for 30 years. the annual interest rate is 4.8 percent. the homeowner is borrowing $200,000. monthly payments must be made for 360 years.

Answer

Brief Explanations:

  • The principal amount (P) in the table is $200,000, so the homeowner is borrowing $200,000.
  • The monthly interest rate (R) is 4%, but the annual interest rate would be 4%×12 = 48% not 4.8%.
  • The total number of monthly payments (n) is 360 which means payments are made for 30 years (360/12 = 30) not 360 years.

Answer:

  • The monthly interest rate is 4 percent.
  • Monthly payments must be made for 30 years.
  • The homeowner is borrowing $200,000.