Question: You want to buy a house for $350,000. The bank will loan you 85% of the purchase price. The mortgage terms are "30 years, monthly payments, and 9% APR."
a. How much will your monthly mortgage payments be?
b. In order to purchase the house you have to come up with a down payment (i.e. portion of the house price that the bank will not lend you). Despite saving for a few years, you are forced to borrow half of the down payment from your parents. You and your parents agree to the following terms for the loan 3% APR, paid back in 10 years with monthly payments. What are the monthly payments you will make to your parents?
c. Over the next 30 years, assuming that you stay in the house, how much will you have paid, in total, for the house?