Question

Jamie purchased a condo in Naples, Florida, for $699,000. She put 20% down and financed the rest at 5% for 35 years. What are Jamie's total finance charges?        A. $600,000.00   B. $626,863.20   C. $606,823.20   D. $457,425.60

Answer 1

Jamie's total finance charges amount to $606,823.20.

Step-by-step explanation:

To calculate Jamie's total finance charges, we first need to find the amount she financed. Since she put down 20%, the down payment will be 20% of $699,000, which is $139,800. The amount she financed is the remaining balance, which is $699,000 - $139,800 = $559,200.

Next, we need to calculate the total interest paid over 35 years. Using the formula for compound interest:

Total Interest = Principal × (1 + Rate)^Time - Principal

Plugging in the values:

Total Interest = $559,200 × (1 + 0.05)^35 - $559,200 = $606,823.20

Therefore, Jamie's total finance charges are $606,823.20.

Answer 2

Correct answer is:Jamie's finance charges are about $6,26,128.20

Solution:-

Given that Jamie purchased a condo in Naples,Florida for $699,000.

She put 20% down and financed the remaining, that is she financed 80% of 699,000$= 0.8X699,000=$5,59,200

And interest rate = 5%=0.05 in decimals

Tenure = 35 years and payment is monthly.

The formula we need to use here is
`A=P(((r)/(n)))/(1-(1+((r)/(n)))^(-nt))`

Where A is the monthly payment for 35 years

P=financed amount=$5,59,200

r=interest rate=0.05

n=number of compoundings per year=12

t=tenure=35 years

Hence
`A=5,59,200(((0.05)/(12)))/(1-(1+(0.05)/(12))^((-12*35)))=2822.21`

So, she has to pay $2822.21 for 35X12=420 months which means she will pay 2822.21X420=$1,185,328.20

Hence finance charges= amount paid for 35 years- loan amount

=1185328.20-559200=$6,26,128.20