Question

Questions 6-10. Suppose Calvin Cordozar Broadus, Jr. (aka Snoop Doggy Dogg) is

considering moving his family to Manhattan. His real estate agent has managed to locate a
penthouse apartment that overlooks Central Park for $2.4 million. He will have $2.1 million
from the sale of his current home as a down payment. Snoop would like to finance the
remainder of the cost and his banker has presented two options: a 30-year fixed-rate
mortgage at 8% or a 20-year fixed-rate mortgage at 7.5%.
How much will snoop have to finance?

Answer 1

The price of the Penthouse is $2.4 million

Down Payment is $2.1 Million

So the amount that must be financed is $2.4 million - $2.1 million = $0.3 million or $300,000

Explanation: