Mathematics with Business Applications

Chapter 10:

Practice Test


1.	Elaine and Ronald Sumter consider purchasing a new home for $179,000. A 15 percent 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.	Tracy and Allen Van Steenburgh have applied for a $100,000 loan at an annual interest rate of 7.50 percent. 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?
		A)	$193,440.00
		B)	$150,000.00
		C)	$93,440.00
		D)	$50,000.00


3.	Lori and Percy Saunders have been granted a mortgage loan at an annual interest rate of 7 percent for 25 years. The home has a selling price of $129,000. They need a 15 percent 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?
		A)	$116,714.00
		B)	$109,650.00
		C)	$26,414.00
		D)	$7,064.00


4.	Susan and Stephan Polansky obtained a 20-year, $95,000 mortgage loan. The interest rate is 7 percent. 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


5.	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 percent 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


6.	The replacement value of the Hernandez's home is estimated at $140,000. They have insured their home for 80 percent of the replacement value. According to the figures below, what is the amount of coverage on the Hernandez's personal property? Insurance Coverage Garage and Other Structures: 10% of Coverage Loss of Use: 30% of Coverage Personal Property: 70% of coverage
		A)	$78,400.00
		B)	$98,000.00
		C)	$112,000.00
		D)	$123,200.00


7.	The replacement value of the Sill's home is estimated at $100,000. They have insured their home for 80 percent 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?
		A)	$329.00
		B)	$307.00
		C)	$265.00
		D)	$248.00


8.	The Klindt's have a monthly combined take-home pay of $3,750. The Klindt's recorded the following housing expenses for the month of August: $878.65 for mortgage payment; $52.50 for insurance premium; $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 guidelines?
		A)	$67.52 over
		B)	$67.52 under
		C)	$2,369.98 over
		D)	$2,369.98 under


9.	The Lawrence's consider purchasing a new home for $224,000. A 10 percent 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


10.	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 percent 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