The presence of private mortgage insurance, PMI, (which is similar to the extra fees shown above)...

The presence of private mortgage insurance, PMI, (which is similar to the extra fees shown above) can play a big role in the affordability of housing. This payment is normally made until you meet a certain threshold. Suppose that the Anderson family bought a house with zero down as part of their mortgage agreement; they need to pay an extra $75 per month until they have paid off 20% of the principal of their home. They bought a $180,000 house on a 30-year mortgage at an interest rate of 13%. Using this information, their monthly payment would be $1,991.16 without the extra fee.
How long will it take the Andersons to pay off the first 20% of their house?

How much will they have paid in PMI fees in this time?

How much interest will the Andersons end up paying over the life of this loan?

What is the total amount the Andersons paid for their $180,000 home?

Expert Solution

Please refer the table below for explanations.

a. 20% of 180,000 = $ 36,000. After paying off $ 36,000 principal of $ 180,000 - $ 36,000 = $ 144,000 would remain. Refer the table below, after the 218th payment, principal remaining goes to $ 144002 which is approximately $ 144,000. 218th payment denotes 18 years and 2 months.

b. They would have paid 218 X $ 75 = $ 16,350 in PMI fees in this time

c. $ 536,814 is the total amount of interest that the Andersons would end up paying

d. Total amount that Andersons paid = Monthly payment X 360 months + Insurance

Total amount that Andersons paid = 1991.16 X 360 months + 16,350 = $ 733,167.6

Please feel free to comment in case you need any further clarifications. Thanks.

Month No.	Principal	Monthly Payment	Interest Component	Principal Component	Principal Remaining
1	180000	1991.16	1950	41	179959
2	179959	1991.16	1950	42	179917
3	179917	1991.16	1949	42	179875
4	179875	1991.16	1949	43	179833
5	179833	1991.16	1948	43	179790
6	179790	1991.16	1948	43	179746
7	179746	1991.16	1947	44	179702
8	179702	1991.16	1947	44	179658
9	179658	1991.16	1946	45	179613
10	179613	1991.16	1946	45	179568
11	179568	1991.16	1945	46	179522
12	179522	1991.16	1945	46	179476
13	179476	1991.16	1944	47	179429
14	179429	1991.16	1944	47	179381
15	179381	1991.16	1943	48	179334
16	179334	1991.16	1943	48	179285
17	179285	1991.16	1942	49	179236
18	179236	1991.16	1942	49	179187
19	179187	1991.16	1941	50	179137
20	179137	1991.16	1941	51	179086
21	179086	1991.16	1940	51	179035
22	179035	1991.16	1940	52	178984
23	178984	1991.16	1939	52	178931
24	178931	1991.16	1938	53	178879
25	178879	1991.16	1938	53	178825
26	178825	1991.16	1937	54	178772
27	178772	1991.16	1937	54	178717
28	178717	1991.16	1936	55	178662
29	178662	1991.16	1936	56	178606
30	178606	1991.16	1935	56	178550
31	178550	1991.16	1934	57	178493
32	178493	1991.16	1934	57	178436
33	178436	1991.16	1933	58	178378
34	178378	1991.16	1932	59	178319
35	178319	1991.16	1932	59	178260
36	178260	1991.16	1931	60	178200
37	178200	1991.16	1930	61	178139
38	178139	1991.16	1930	61	178078
39	178078	1991.16	1929	62	178016
40	178016	1991.16	1929	63	177953
41	177953	1991.16	1928	63	177890
42	177890	1991.16	1927	64	177826
43	177826	1991.16	1926	65	177761
44	177761	1991.16	1926	65	177695
45	177695	1991.16	1925	66	177629
46	177629	1991.16	1924	67	177562
47	177562	1991.16	1924	68	177495
48	177495	1991.16	1923	68	177427
49	177427	1991.16	1922	69	177358
50	177358	1991.16	1921	70	177288
51	177288	1991.16	1921	71	177217
52	177217	1991.16	1920	71	177146
53	177146	1991.16	1919	72	177074
54	177074	1991.16	1918	73	177001
55	177001	1991.16	1918	74	176927
56	176927	1991.16	1917	74	176853
57	176853	1991.16	1916	75	176778
58	176778	1991.16	1915	76	176702
59	176702	1991.16	1914	77	176625
60	176625	1991.16	1913	78	176547
61	176547	1991.16	1913	79	176468
62	176468	1991.16	1912	79	176389
63	176389	1991.16	1911	80	176309
64	176309	1991.16	1910	81	176227
65	176227	1991.16	1909	82	176145
66	176145	1991.16	1908	83	176063
67	176063	1991.16	1907	84	175979
68	175979	1991.16	1906	85	175894
69	175894	1991.16	1906	86	175808
70	175808	1991.16	1905	87	175722
71	175722	1991.16	1904	88	175634
72	175634	1991.16	1903	88	175546
73	175546	1991.16	1902	89	175456
74	175456	1991.16	1901	90	175366
75	175366	1991.16	1900	91	175275
76	175275	1991.16	1899	92	175182
77	175182	1991.16	1898	93	175089
78	175089	1991.16	1897	94	174995
79	174995	1991.16	1896	95	174899
80	174899	1991.16	1895	96	174803
81	174803	1991.16	1894	97	174705
82	174705	1991.16	1893	99	174607
83	174607	1991.16	1892	100	174507
84	174507	1991.16	1890	101	174407
85	174407	1991.16	1889	102	174305
86	174305	1991.16	1888	103	174202
87	174202	1991.16	1887	104	174098
88	174098	1991.16	1886	105	173993
89	173993	1991.16	1885	106	173887
90	173887	1991.16	1884	107	173779
91	173779	1991.16	1883	109	173671
92	173671	1991.16	1881	110	173561
93	173561	1991.16	1880	111	173450
94	173450	1991.16	1879	112	173338
95	173338	1991.16	1878	113	173225
96	173225	1991.16	1877	115	173110
97	173110	1991.16	1875	116	172994
98	172994	1991.16	1874	117	172877
99	172877	1991.16	1873	118	172759
100	172759	1991.16	1872	120	172639
101	172639	1991.16	1870	121	172518
102	172518	1991.16	1869	122	172396
103	172396	1991.16	1868	124	172273
104	172273	1991.16	1866	125	172148
105	172148	1991.16	1865	126	172022
106	172022	1991.16	1864	128	171894
107	171894	1991.16	1862	129	171765
108	171765	1991.16	1861	130	171635
109	171635	1991.16	1859	132	171503
110	171503	1991.16	1858	133	171370
111	171370	1991.16	1857	135	171235
112	171235	1991.16	1855	136	171099
113	171099	1991.16	1854	138	170961
114	170961	1991.16	1852	139	170822
115	170822	1991.16	1851	141	170682
116	170682	1991.16	1849	142	170539
117	170539	1991.16	1848	144	170396
118	170396	1991.16	1846	145	170251
119	170251	1991.16	1844	147	170104
120	170104	1991.16	1843	148	169955
121	169955	1991.16	1841	150	169805
122	169805	1991.16	1840	152	169654
123	169654	1991.16	1838	153	169501
124	169501	1991.16	1836	155	169346
125	169346	1991.16	1835	157	169189
126	169189	1991.16	1833	158	169031
127	169031	1991.16	1831	160	168871
128	168871	1991.16	1829	162	168709
129	168709	1991.16	1828	163	168546
130	168546	1991.16	1826	165	168380
131	168380	1991.16	1824	167	168213
132	168213	1991.16	1822	169	168045
133	168045	1991.16	1820	171	167874
134	167874	1991.16	1819	173	167701
135	167701	1991.16	1817	174	167527
136	167527	1991.16	1815	176	167351
137	167351	1991.16	1813	178	167172
138	167172	1991.16	1811	180	166992
139	166992	1991.16	1809	182	166810
140	166810	1991.16	1807	184	166626
141	166626	1991.16	1805	186	166440
142	166440	1991.16	1803	188	166252
143	166252	1991.16	1801	190	166062
144	166062	1991.16	1799	192	165870
145	165870	1991.16	1797	194	165676
146	165676	1991.16	1795	196	165479
147	165479	1991.16	1793	198	165281
148	165281	1991.16	1791	201	165080
149	165080	1991.16	1788	203	164877
150	164877	1991.16	1786	205	164672
151	164672	1991.16	1784	207	164465
152	164465	1991.16	1782	209	164256
153	164256	1991.16	1779	212	164044
154	164044	1991.16	1777	214	163830
155	163830	1991.16	1775	216	163614
156	163614	1991.16	1772	219	163395
157	163395	1991.16	1770	221	163174
158	163174	1991.16	1768	223	162950
159	162950	1991.16	1765	226	162725
160	162725	1991.16	1763	228	162496
161	162496	1991.16	1760	231	162266
162	162266	1991.16	1758	233	162032
163	162032	1991.16	1755	236	161796
164	161796	1991.16	1753	238	161558
165	161558	1991.16	1750	241	161317
166	161317	1991.16	1748	244	161074
167	161074	1991.16	1745	246	160827
168	160827	1991.16	1742	249	160579
169	160579	1991.16	1740	252	160327
170	160327	1991.16	1737	254	160073
171	160073	1991.16	1734	257	159816
172	159816	1991.16	1731	260	159556
173	159556	1991.16	1729	263	159293
174	159293	1991.16	1726	265	159028
175	159028	1991.16	1723	268	158759
176	158759	1991.16	1720	271	158488
177	158488	1991.16	1717	274	158214
178	158214	1991.16	1714	277	157937
179	157937	1991.16	1711	280	157656
180	157656	1991.16	1708	283	157373
181	157373	1991.16	1705	286	157087
182	157087	1991.16	1702	289	156798
183	156798	1991.16	1699	293	156505
184	156505	1991.16	1695	296	156209
185	156209	1991.16	1692	299	155911
186	155911	1991.16	1689	302	155608
187	155608	1991.16	1686	305	155303
188	155303	1991.16	1682	309	154994
189	154994	1991.16	1679	312	154682
190	154682	1991.16	1676	315	154367
191	154367	1991.16	1672	319	154048
192	154048	1991.16	1669	322	153726
193	153726	1991.16	1665	326	153400
194	153400	1991.16	1662	329	153070
195	153070	1991.16	1658	333	152738
196	152738	1991.16	1655	337	152401
197	152401	1991.16	1651	340	152061
198	152061	1991.16	1647	344	151717
199	151717	1991.16	1644	348	151370
200	151370	1991.16	1640	351	151018
201	151018	1991.16	1636	355	150663
202	150663	1991.16	1632	359	150304
203	150304	1991.16	1628	363	149941
204	149941	1991.16	1624	367	149574
205	149574	1991.16	1620	371	149204
206	149204	1991.16	1616	375	148829
207	148829	1991.16	1612	379	148450
208	148450	1991.16	1608	383	148067
209	148067	1991.16	1604	387	147680
210	147680	1991.16	1600	391	147289
211	147289	1991.16	1596	396	146893
212	146893	1991.16	1591	400	146493
213	146493	1991.16	1587	404	146089
214	146089	1991.16	1583	409	145681
215	145681	1991.16	1578	413	145268
216	145268	1991.16	1574	417	144850
217	144850	1991.16	1569	422	144428
218	144428	1991.16	1565	427	144002
219	144002	1991.16	1560	431	143571
220	143571	1991.16	1555	436	143135
221	143135	1991.16	1551	441	142694
222	142694	1991.16	1546	445	142249
223	142249	1991.16	1541	450	141799
224	141799	1991.16	1536	455	141344
225	141344	1991.16	1531	460	140884
226	140884	1991.16	1526	465	140419
227	140419	1991.16	1521	470	139949
228	139949	1991.16	1516	475	139474
229	139474	1991.16	1511	480	138994
230	138994	1991.16	1506	485	138508
231	138508	1991.16	1501	491	138018
232	138018	1991.16	1495	496	137522
233	137522	1991.16	1490	501	137021
234	137021	1991.16	1484	507	136514
235	136514	1991.16	1479	512	136002
236	136002	1991.16	1473	518	135484
237	135484	1991.16	1468	523	134960
238	134960	1991.16	1462	529	134431
239	134431	1991.16	1456	535	133896
240	133896	1991.16	1451	541	133356
241	133356	1991.16	1445	546	132809
242	132809	1991.16	1439	552	132257
243	132257	1991.16	1433	558	131699
244	131699	1991.16	1427	564	131134
245	131134	1991.16	1421	571	130564
246	130564	1991.16	1414	577	129987
247	129987	1991.16	1408	583	129404
248	129404	1991.16	1402	589	128815
249	128815	1991.16	1395	596	128219
250	128219	1991.16	1389	602	127617
251	127617	1991.16	1383	609	127008
252	127008	1991.16	1376	615	126393
253	126393	1991.16	1369	622	125771
254	125771	1991.16	1363	629	125142
255	125142	1991.16	1356	635	124507
256	124507	1991.16	1349	642	123865
257	123865	1991.16	1342	649	123215
258	123215	1991.16	1335	656	122559
259	122559	1991.16	1328	663	121895
260	121895	1991.16	1321	671	121225
261	121225	1991.16	1313	678	120547
262	120547	1991.16	1306	685	119862
263	119862	1991.16	1299	693	119169
264	119169	1991.16	1291	700	118469
265	118469	1991.16	1283	708	117761
266	117761	1991.16	1276	715	117046
267	117046	1991.16	1268	723	116323
268	116323	1991.16	1260	731	115592
269	115592	1991.16	1252	739	114853
270	114853	1991.16	1244	747	114106
271	114106	1991.16	1236	755	113351
272	113351	1991.16	1228	763	112588
273	112588	1991.16	1220	771	111816
274	111816	1991.16	1211	780	111036
275	111036	1991.16	1203	788	110248
276	110248	1991.16	1194	797	109451
277	109451	1991.16	1186	805	108646
278	108646	1991.16	1177	814	107832
279	107832	1991.16	1168	823	107009
280	107009	1991.16	1159	832	106177
281	106177	1991.16	1150	841	105336
282	105336	1991.16	1141	850	104486
283	104486	1991.16	1132	859	103627
284	103627	1991.16	1123	869	102758
285	102758	1991.16	1113	878	101880
286	101880	1991.16	1104	887	100993
287	100993	1991.16	1094	897	100096
288	100096	1991.16	1084	907	99189
289	99189	1991.16	1075	917	98272
290	98272	1991.16	1065	927	97346
291	97346	1991.16	1055	937	96409
292	96409	1991.16	1044	947	95462
293	95462	1991.16	1034	957	94505
294	94505	1991.16	1024	967	93538
295	93538	1991.16	1013	978	92560
296	92560	1991.16	1003	988	91572
297	91572	1991.16	992	999	90573
298	90573	1991.16	981	1010	89563
299	89563	1991.16	970	1021	88542
300	88542	1991.16	959	1032	87510
301	87510	1991.16	948	1043	86467
302	86467	1991.16	937	1054	85412
303	85412	1991.16	925	1066	84346
304	84346	1991.16	914	1077	83269
305	83269	1991.16	902	1089	82180
306	82180	1991.16	890	1101	81079
307	81079	1991.16	878	1113	79966
308	79966	1991.16	866	1125	78841
309	78841	1991.16	854	1137	77704
310	77704	1991.16	842	1149	76555
311	76555	1991.16	829	1162	75393
312	75393	1991.16	817	1174	74219
313	74219	1991.16	804	1187	73031
314	73031	1991.16	791	1200	71832
315	71832	1991.16	778	1213	70619
316	70619	1991.16	765	1226	69392
317	69392	1991.16	752	1239	68153
318	68153	1991.16	738	1253	66900
319	66900	1991.16	725	1266	65634
320	65634	1991.16	711	1280	64354
321	64354	1991.16	697	1294	63060
322	63060	1991.16	683	1308	61752
323	61752	1991.16	669	1322	60429
324	60429	1991.16	655	1337	59093
325	59093	1991.16	640	1351	57742
326	57742	1991.16	626	1366	56376
327	56376	1991.16	611	1380	54996
328	54996	1991.16	596	1395	53601
329	53601	1991.16	581	1410	52190
330	52190	1991.16	565	1426	50764
331	50764	1991.16	550	1441	49323
332	49323	1991.16	534	1457	47866
333	47866	1991.16	519	1473	46394
334	46394	1991.16	503	1489	44905
335	44905	1991.16	486	1505	43400
336	43400	1991.16	470	1521	41879
337	41879	1991.16	454	1537	40342
338	40342	1991.16	437	1554	38788
339	38788	1991.16	420	1571	37217
340	37217	1991.16	403	1588	35629
341	35629	1991.16	386	1605	34024
342	34024	1991.16	369	1623	32401
343	32401	1991.16	351	1640	30761
344	30761	1991.16	333	1658	29103
345	29103	1991.16	315	1676	27427
346	27427	1991.16	297	1694	25733
347	25733	1991.16	279	1712	24021
348	24021	1991.16	260	1731	22290
349	22290	1991.16	241	1750	20540
350	20540	1991.16	223	1769	18771
351	18771	1991.16	203	1788	16984
352	16984	1991.16	184	1807	15176
353	15176	1991.16	164	1827	13350
354	13350	1991.16	145	1847	11503
355	11503	1991.16	125	1867	9637
356	9637	1991.16	104	1887	7750
357	7750	1991.16	84	1907	5843
358	5843	1991.16	63	1928	3915
359	3915	1991.16	42	1949	1966
360	1966	1991.16	21	1970	-4

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Which is not deductible above the line? A. Self-employed health insurance B Cost of preparing the schedule C (business part) of your tax return C. "Employee" share of the self-employment tax D. "Employment" share of the self-employment tax

1. Which source of hospital revenue was zero prior to 1965? [A] Private health insurance...

1. Which source of hospital revenue was zero prior to 1965? [A] Private health insurance [B] Out of pocket payments [C] Medicare 2. In the United States, our health care system allows those with high incomes to purchase better quality care and medical services. What is an example of a way socialized health care systems allow citizens to purchase improved care? [A] “Los Privados”, a Cuban service of private physicians. [B] Medical tourism, where wealthy patients...

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