The cost of a home you want to purchase is $260,000

Solution to A

Down payment required is 20% of Purchase price of Home.

So Down payment = $ 260,000 x 0.2 = $ 52,000

Solution to B

Mortgage amount will be difference of cost of home and down payment

Mortgage amount = $ 260,000 - $ 52,000 = $ 208,000

Solution to C

Points are the upfront charges paid to the lender as part of mortgage arrangement. 4 points on a mortgage means 4% of the mortgage amount.

So amount to be paid for points = $ 208,000 x 0.04 = $ 8,320

Solution to D

Now monthly payment for mortgage is calculated by below formula-

Monthly payment = Mortgage amount x r x (1 + r)ⁿ

                                                   (1 + r)ⁿ - 1

Where r is the monthly interest rate = 4% /12 = 0.33% = 0.0033

              n is the number of months = 30 years x 12 = 360 months

Monthly payment = 208000 x 0.0033 x (1 + 0.0033)³⁶⁰

                                                (1 + 0.0033)³⁶⁰ - 1

                                    = 686.4 x 3.2741

                                                3.2741 – 1

                                   = 2247.3422

                                          2.2741

Monthly payment = $ 988.23

Solution to E

Total payments by end of loan = Monthly payments x number of months

            = 988.23 x 360

Total payments by end of loan = $ 355,762.8

Solution to F

Interest paid = Total payments by end of loan – Mortgage amount

                          = $ 355,762.8 - $ 208,000

Interest paid = $ 147,762.8