00:01
Okay, this problem says jamal has been approved for a $125 ,000 loan, 30 -year mortgage with an arp of 5 .3%.
00:11
He is closing on april 5th.
00:14
How much should he expect to pay in prepaid interest at closing? okay, so i already started writing this out for us.
00:23
So our key in this problem is going to be 30 because he signed a 30 -year mortgage.
00:30
So that's where that comes from.
00:34
Our rate in this problem is the arp here, which was 5 .3%.
00:42
But when we make 5 .3 into a decimal, we get 0 .053.
00:50
So that's where this comes from.
00:56
He signed for a 10 % down payment so that means that means that 90 % of his money was a loan so to find how much was a loan we did the loan 125 ,000 times 0 .9 and we got this 112 ,500.
01:24
And then we're going to multiply this number by the rate, so that 0 .053...