Module 17 Quiz Flashcards Preview

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Flashcards in Module 17 Quiz Deck (11)
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1
Q

What is the monthly debt service on a mortgage of $100,000, paid monthly for 25 years at 9.5% interest?

$1,283.70
$1,137.70
$873.70
$1,098.70

A

$873.70

Note: 25 g n – 9.5 g i – 100,000 CHS PV – PMT – 873.70.

2
Q

What is the annual debt service on an apartment building with $500,000 mortgage for 30 years at 5%?

$62,814.30
$71,319.88
$72,091.48
$32,209.32

A

$32,209.32

Enter $500,000 (CHS) as the PV. Then enter 5 g for the interest rate (i) and 30 g (n) for the number of periods. Press the PMT key and multiply that result by 12 (months) to derive the yearly debt service.

3
Q

Frederick purchased a property for $200,000 and the seller offered a private mortgage with the stipulation that Frederick has a 25% down payment. The contract terms for the mortgage are 8% interest and a 20- year term with a balloon at the end due in the amount of $25,000. What is the monthly mortgage payment based on this mortgage contract?

$1,254.66
$1,672.88
$1,045.55
$964.77

A

$1,045.55

Enter $125,000 (CHS) as the PV. Then enter 8 g for the interest rate (i) and 20 g (n) for the number of periods. Press the PMT key.

4
Q

A couple, who are first-time homebuyers, are contemplating a purchase and trying to figure out their monthly mortgage payment. The couple plans to offer $300,000 with a $60,000 down payment. Their bank has indicated they can obtain a 25-year mortgage at 4.25%. If these buyers ask you what their monthly payment might be based on this information, what do
you tell them?

about $1,300 per month
about $1,180 per month
about $1,625 per month
about $1,486 per month

A

about $1,300 per month

PV is $240,000, n is 300 and i is 0.35. Solve for the payment.

5
Q

Janus has a monthly mortgage payment of $2,983.85 based on a 5.75% loan and an original principal amount of $425,000. What is the term of this mortgage?

25 years
30 years
20 years
15 years

A

20 years

Enter $2,983.85 (CHS) as the PMT. Then enter 5.75 g for the interest rate (i) and $425,000 for PV. Press the (n) key and you will have 240 in the display (which is the total number of payments. Divide that number by 12 (months) to derive the correct answer.

6
Q

What is the monthly payment for a $135,500 mortgage, at 6.5% for 25 years paid monthly?

$914.91
$1,214.78
$714.90
$2,014.98

A

$914.91

25 g n – 6.5 g i – 135,500 CHS PV – FV – PMT – 914.91.

7
Q

Alyson wants a $100,000 mortgage, but she needs to know which interest rate and term will provide a monthly payment that doesn’t exceed $620. Which rate and term should she choose?

  1. 75% and 25 years
  2. 25% and 30 years
  3. 5% and 20 years
  4. 0% and 25 years
A

6.25% and 30 years

This payment would be $615.71, which is the lowest of the group, although this may not be the smartest choice for Alyson because the overall interest cost is higher.

8
Q

Jacob wants to find out the amount that remains on his mortgage balance. The original 30-year mortgage was $150,000 at 6.25% interest. If Jacob has exactly 25 years left, what is the current balance?

$135,376.37
$139,581.54
$94,585.45
$140,005.86

A

$140,005.86

Solve for payment using 150,000 CHS PV; 6.25 g i; and 30 g n. Then input 5 g n and press FV to derive the remaining balance

9
Q

Calculate the annual interest rate on a $195,000 mortgage for a duplex property that has a $1,570.90 monthly payment and a 20-year term.

  1. 5%
  2. 67%
  3. 0%
  4. 5%
A

7.5%

Enter all the information and solve for the interest rate. $195,000 CHS PV; 1570.9 PMT and 20 g n. Press I to derive the interest rate, but remember to multiply it by 12 to obtain the annual interest.

10
Q

An appraiser is trying to figure out the purchase price of a private land contract that hasn’t been recorded. The appraiser uncovered that the buyer is paying $3,337.25 per month and the interest rate is 7.5% for 15 years. If the appraiser assumes the buyer put 20% down at the time of purchase, what is the indicated sale price for the property?

about $432,000
about $480,000
about $464,000
about $450,000

A

Not $432,000 (I think $450,000)

See Module 17 page Calculation of a Remaining Mortgage Balance and cited Course Handbook pages for more information. (and Quiz 17 Q 10)

11
Q

Romero has been approved for a $350,000 adjustable rate mortgage with interest set at 6.5% and monthly payments set up over the 30-year term of the loan.

  1. What is Romero’s monthly payment?
  2. Using the payment calculated, what will be the balance at the end of the 6th year?
  3. What is the percentage paid off after six years?
  4. Romero originally wanted a shorter loan term, but the payments would be $2,609.51, and that was too high for Romero. What was the loan term based on that payment?
  5. If the interest rate were adjusted after six years to 8%, what would the new payment be in the 7th year? Hint: Use the remaining balance from Question #2 to calculate the new payment.
A

1.$2,212.24 payment
2. $322,228.79 remaining balance
3. about 8%
4. 20 years
Bonus: $2,520 paymnet