Max is plannin to buy a house. After some negotiation, Max agrees to pay $500,000 for the house. Being short of cash, Max is going to take a 30-year monthly compounding mortgage from his bank with an APR of 6%. The bank is willing to lend 80% of the house price to Max if Max can pay for the rest 20% of the house price and closing cost (5% of the loan amount) with cash. 1. What is the monthly payment?
$2,398.20
$2,997.75
$1,599.55
$2,278.39
$3,308.22 2. How much of the SECOND payment is toward principal?
$997.75
$2,000
$398.20
$400.19
$278.39