Calculate total annual interest, Financial Accounting

Q. Chrissy currently has a credit card that charges 15 percent interest. She usually carries a balance of about $500. Chrissy has received an offer for a new credit card with a teaser rate of 3 percent for the first three months; after that, the rate goes to 19.5 percent. What will her total annual interest be with her current card? What will her interest be the first year after she switches?

1)      You are considering the purchase of a 2,300 square foot house that is being offered for $238,500. After researching recent home sales in the area, you find three that are comparable. The first was a 2,500 square foot home that sold for $225,000, the second was a 2,200 square foot home that sold for $200,000 and the third was a 2,000 square foot home that sold for $178,000. Based on your analysis, what would be a reasonable offer on the house? (Round all computations to the nearest dollar.)

2)      List four key components of closing costs

3)      Chuck obtained a mortgage of $90,000 to finance a $120,000 home. The title search will be $400, appraisal fee $500, application fee $900, and he will pay one percent origination fee. How much are his closing costs?

4)      For a $72,000 mortgage at 9 percent, the monthly payments would be $730 for a 15-year mortgage and $579 for a 30-year mortgage. What would be the total savings in interest by using a 15-year mortgage?

5)      If the rent on an apartment is $600 per month, which is equal to a mortgage payment on a house, how much additional tax savings will you realize if $200 of the monthly mortgage payment is interest and your tax bracket is 25 percent?

6)      If a current mortgage payment of $792 per month can be reduced to $578 per month by refinancing, how many months would you need to remain in the house to recoup refinancing charges of $3,784? (Round up to the nearest month.)

Posted Date: 2/14/2013 2:45:30 AM | Location : United States

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