Question

Can someone tell me how to solve this?

Drake is purchasing a home for $249,000. He makes a 30% down payment and obtains a 25-year fixed rate mortgage loan at 5% annual interest. His monthly payments are $1,018.94. He pays an intangible tax of 0.4%. Which of the following is the total cost of principal, interest, down payment, and intangible tax?

1)
$305,682.00


2)
$381,079.20


3)
$306,379.20


4)
$381,378.00

I chose 1 as the answer and it said it was wrong. It said 2 is the right answer but I don't know how they found it.

Answer 1

Sure

Down payment
249,000×0.3=74,700

Principal
249,000−74,700=174,300

Total interest
Total paid-principle
25years=300months so
(1,018.94×300)−174,300
=131,382 this is total interest

intangible tax
249,000×0.004
=996


total cost of principal, interest, down payment, and intangible tax
74,700+174,300+131,382+996
=381,378....answer

Hope it helps