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3.( TCO 3) Carla Brown wants to know what price home she can afford. Her annual gross income is $ 45,000. She owes $ 1,050 per month on other debts and expects her property taxes and homeowners insurance to cost $ 250 per month. She knows she can get a 5.0 %, 30- year mortgage, so her mortgage payment factor is 5.37. She expects to make a 20 % down payment. What is Michelle ' s affordable home purchase price? Assume a lender will use a 38 % monthly gross income guideline. Round your answer to the nearest $ 100.( Points: 10)
4.( TCO 3) Identify two or three sources of consumer credit and discuss the advantages and
disadvantages of each type selected.( Points: 10)
5.( TCO 5) Select two or three investment alternatives and describe how the influential factors of safety, risk, income, growth, and liquidity affect each investment alternative.( Points: 10)
6.( TCO 7) What is a will? Identify the primary types of wills. What are the ramifications of not having a will?( Points: 10)
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TCO 1 Time value of money relationships & applications; opportunity costs; personal financial statements-Problem Set 1
1. Ben Collins plans to buy a house for $ 65,000. If that real estate property is expected to increase in value 5 percent each year, what would its approximate value be seven years from now?