Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 34000 at the time you start repayment, the interest rate is 7.5% APR, and you elect the standard repayment plan of a fixed amount each month for 10 years. What is your monthly repayment? Repayment amount = How much will you pay in interest?Interest paid =arrow_forwardb. You have a $300,000 mortgage with a 3.6% annual percentage rate with monthly compounding and a 30-year maturity. What is the monthly payment on your mortgage? What is the effective annual interest rate on your mortgage?arrow_forwardYou buy a house for $230000, and take out a 30-year mortgage at 6% interest. For simplicity, assume that interest compounds continuously. A) What will be your annual mortgage payment? $ per year %24arrow_forward
- A borrower made a constant payment mortgage loan 8 years ago for $400,000 at 12 percent interest for 30 years. 1. What is the monthly payment? 2. What is the current loan balance? 3. Assume this is homeowner has been offered a chance for refinance for the amount at the current balance for 22 years at 10.5% interest rate. What is the monthly payment if the homeowner chooses to refinance? 4. If the origination fees and closing costs are $25,500, and the costs are not financed by the lender. What is the effective cost of refinancing? Should this homeowner refinance? 5. If this homeowner plans to sell the house in 5 years, should this homeowner refinance (show your answer with the effective annual rate)? use excel to get the answers and show the formulasarrow_forwardConsider a home mortgage of $125,000 at a fixed APR of 4.5% for 25 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest. ..... a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.)arrow_forwardSuppose that a house was purchased with the buyer taking out a 20 year,$350,000 mortgage at 3% interest compounded monthly.(i) What will the monthly payments be?(ii) Find the total amount of interest paid when the loan is amortized over 20 years.arrow_forward
- Imagine you get a $450,000 closed floating rate mortgage (no CMHC needed) having a three-year term and amortized over 25 years. Although the interest rate on the mortgage would change, your monthly payments would remain fixed for the term. Monthly payments would be calculated based on APR of %4.8 compounded monthly and amortization period of 25 years. The actual amount of the interest accrued will be deducted from your fixed monthly payments and the rest would be used for principal repayment. Now, assume that the floating rate itself is 4.2% for the first 6 months, then suddenly jumps to 6% for the next 12 months, then drops to 3.6% for the next 6 months, and then declines to 3% for the final 12 months. Note that all rates are quoted as an APR and compounded monthly. Part A: How much money do you owe (i.e. what is the outstanding balance) after 18 months? Part B: How much interest did you pay over the term of the mortgage? How much was principal?arrow_forwardUse chart.arrow_forward5) You have a 25-year $800,000 mortgage that you make monthly payments on. The quoted rate of is 4.54% compounded semi-annually. Show the amortization table for the first 3 payments. How much interest payments have you done after the first 3 payments. What is the balance of the loan at the end of year 12?arrow_forward
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