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Liz and Nick are buying a $725,000 home. They have been approved for a 5.25% APR, 30-year mortgage. They made a 20% down payment and will be closing on March 11. Part A What is their interest on the loan for one year? Part B What is the daily interest? Part C How much should they expect to pay in prepaid interest at the closing?

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Liz and Nick are buying a $725,000 home. They have been approved for a 5.25% APR, 30-year mortgage. The total amount paid by Liz and Nick will be $500.54

What is a down payment?

An initial amount made when something is bought on credit.

Liz and Nick are buying a $725,000 home. They have been approved for a 5.25% APR, 30-year mortgage. They made a 20% down payment and will be closing on March 11.

r = 5.25% or 0.0525

Part A

He made a 20% down payment,

[tex]725,000 \times 20/100\\145000[/tex]

This amount is multiplied by the rate.

[tex]145000\times 0.0525\\\\7612.5[/tex]

Part B For per day value, divide this by 365.

= 7612.5/365

= $20.856

Given is the deal is closing on March 11. March has 31 days, so, there are 24 days left.

Part C

So, the final amount becomes =  $20.856 x 24

                                                  = 500.54

Learn more about down payment;

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