Our Services

Get 15% Discount on your First Order

[rank_math_breadcrumb]

Quantative reasoning

  1. Assume that a family is purchasing a typical house by making a $30,000 down payment and then financing a $280,000 mortgage at an annual interest rate of 6.25% (a typical rate for a 30-year loan). The size of their monthly payment will depend on the term of the mortgage.

The formula or the Excel function “pmt” can be used to compute these monthly mortgage payments. If using Excel the 3 arguments of function “pmt” are:

Rate (the monthly interest rate):   0.0625/12

Nper (the total number of monthly payments) and

Pv (the mortgage amount)

  1. Find the monthly payments if the $280,000 was financed over 15 years.
  2. Find the monthly payments if the $280,000 was financed over 30 years.
  3. Multiply your answer to part (a) by the number of payments to find how much the family would need to pay in total over the life of the 15-year loan. Subtract the principal amount from this to give the amount of interest paid over the life of the loan.
  4. Multiply your answer to part (b) by the number of payments to find how much the family would need to pay in total over the life of the 30-year loan. Subtract the principal amount from this to give the amount of interest paid over the life of the loan.
  5. A standard rule for lenders is that a family’s house payment should not exceed 28% of their monthly income. For a family making $6500 per month, this would equate to $1820 per month. Assuming monthly costs of $350 for property tax and homeowner’s insurance, this would allow for a $1470 monthly mortgage payment.

The formula  or the Excel function “pv” can be used to compute the mortgage a family could afford.  If using Excel the 3 arguments of function “pv” are:

Rate (the monthly interest rate):   0.0625/12

Nper (the total number of monthly payments) and

Pmt (the monthly mortgage amount)

  1. Assuming that a family wants to make a $1470 monthly payment, give the mortgage that a family could afford at an annual interest rate 6.25% for a 15-year mortgage.
  2. Assuming that a family wants to make a $1470 monthly payment, give the mortgage that a family could afford at an annual interest rate 6.25% for a 30-year mortgage.
  3. Based on your answers to questions 1 and 2, what is the advantage of having a 15-year mortgage, and what is the advantage of having a 30-year mortgage? Which option do you think is wiser? 
  4. Proverbs 22:7 says, “The rich rules over the poor, and the borrower is the slave of the lender.” In light of this verse, and the Bible’s more general teaching on debt, many Christians have counseled that incurring excessive debt is undesirable. As financial expert Dave Ramsey puts it: “If you must take out a mortgage, pretend only 15-year mortgages exist.” Discuss how you would apply the Bible’s warning about borrowing when deciding how to go about purchasing a home. Does the Bible prohibit any kind of borrowing? Does it influence which type of mortgage is more attractive? Or does it not really apply to this type of loan?

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Level Case 1 Wyatt

  Mr. Goldberg has been teaching a unit on fractions. He was pleased that all of his students seemed to quickly master adding and subtracting two fractions. However, when he began teaching the students how to multiply fractions, a small number of them did not readily learn the content. But

peritmetr

  whatsthe peritmter of this trapezoid EFGH the points are E(-2,2) F(5,2) G(2,-2) H(-2,-2)

can you write a data table for this data and complete it?

 Age Amount from previous year Amount Linda added from savings that year Amount invested for that year Interest rate for that year Amount at year end 22 998.01 500 1498.01 11.00% 1662.79 23 1662.79 600 11.25% 24 700 11.50% 25 800 11.75% 26 27 28 29 30 31 32 33

R studio

MthStat 568/768 �Multivariate Statistical Analysis �Spring 2025 Homework 5 Due Wednesday, April 9 1. Consider the spambase data set, where emails are classi�ed as spam or not, and 57 feature variables are measured on each of them (see full description on p. 259 of the book). (a) Split the data

math

You must post before seeing replies. Edit history will be available to instructors. Due Apr 14 20 points 6 Replies (6) Career based on Math Path View Split Screen All Search entries or author… Newest First Answer all parts to the prompt below.  Entire activity taken from Winning at Math

Stats project

10 slides total, I’ve already done 3 slides. Two of them need small corrections that have been suggested by Professor. 

Mathematics – Numerical analysis can you complete a math assignment

Assignment/Problem Set #3 (Correlation on Chapter 5) Students must provide answers to each question beneath the question. Students must show all work including all SPSS outputs and interpret the outputs. This means that you cannot submit only answers. All variables must be labeled, you can abbreviate the names of the

Math

Help Statistics: Exam 2 Name:_________________________________ Round final answers to the fourth and write as a probability (decimal) unless otherwise stated. Problem 1 1. You have the opportunity to play two games. Create a probability distribution (table) and compute the expected value for each game. Round to the second. o Game

Math

Need this asap Statistics: Exam 2 Name:_________________________________ Round final answers to the fourth and write as a probability (decimal) unless otherwise stated. Problem 1 1. You have the opportunity to play two games. Create a probability distribution (table) and compute the expected value for each game. Round to the second.

Mathematics Purchasing a Vehicle Assignment

  Part 1: Comparing New to Used  Purchasing a new vehicle can greatly affect your financial situation. You will gain a better understanding of the car-buying process and the components that affect your monthly payments. You will compare the costs of buying a new vehicle and a used vehicle in the same

Mathematics three assignments

here are three assignments needed soon MATH325 Lab 5 Using Microsoft Excel to conduct ANOVA procedures The steps required for completing the deliverables for this assignment, including screen shots that correspond to these instructions, are outlined below. Complete the questions below and paste the answers from Excel below each question

math

You must post before seeing replies. Edit history will be available to instructors. Due Mar 31 20 points 9 Replies (9) Studying Math is like… View Split Screen All Search entries or author… Newest First Read the following passage summarized from Winning at Math by Paul Nolting and then answer

SPSS

I need imputing some number in the spss program and generating the tables 

Categorical Statistics

Just need this done by someone who knows what they’re doing, this is for undergrad. I may have to defend/explain my project so explanations of what you did would help. Thanks

Area of triangle

 A rhombus is shown with measurements in centimeters ( cmcm)  (in the photo)  What is the area, in square centimeters ( cm2cm2), of the rhombus? Round answer to the nearest tenth, if needed.