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FPQP REVIEW (PRACTICE PROBLEMS) QUIZZES & ANS 100% CORRECT!!
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FPQP REVIEW (PRACTICE PROBLEMS) QUIZZES & ANS 100% CORRECT!!
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FPQP REVIEW (PRACTICE PROBLEMS)QUIZZES & ANS 100% CORRECT!!
Phan and Henri would like to purchase a home, and have come to you for
advice. The house they are considering would require a monthly mortgage
payment (principal and interest) of $1,700. The couple estimates their monthly
insurance and property taxes will be about $475. Phan and Henri's gross
income is $95,000 annually, and their net income is $72,000 per year.
Regarding mortgage loan qualification, what advice would you give Phan and
Henri? Answer - Answer: Their front-end debt-to-income ratio is just below the
28% guideline, and they should qualify for the mortgage.
Explanation The front-end ratio considers principal, interest, taxes, and
insurance (PITI) relative to gross annual income. In this case it would be $2,175
× 12 = $26,100 annually, so $26,100 ÷ $95,000 = 27.47%. Most mortgage
lenders use a 28% guideline for the front-end ratio and a 36% guideline when
using the back-end ratio. LO 2-4
From Practice Exam 1
If John invests $10,000 into an account that will pay him 10% compounded
monthly, how much will his account be worth in 20 years? Answer - Answer:
$73,281
Explanation: Set calculator for 12 P/YR, end mode, C ALL. 10,000 +/- PV, 10
I/YR, 20 DOWNSHIFT N (240 compounding periods), solve for FV = $73,280.74
LO 3-2
From Practice Exam 1
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