A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They puchased their home 11 years ago for $61,158. The home was financed by paying 10% down and signing a 30-year mortgage at 8.1% on the unpaid balance. Equal monthly payments were made to amortize the loan over the 30-year period. The net market value of the house is now $100,000. After making their 132nd payment, they applied to the loan company for the maximum loan. How much (to the nearest dollar) will they receive?
A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They puchased their home 11 years ago for $61,158. The home was financed by paying 10% down and signing a 30-year mortgage at 8.1% on the unpaid balance. Equal monthly payments were made to amortize the loan over the 30-year period. The net market value of the house is now $100,000. After making their 132nd payment, they applied to the loan company for the maximum loan. How much (to the nearest dollar) will they receive?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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Question
A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They puchased their home
11
years ago for
$61,158.
The home was financed by paying
10%
down and signing a
30-year
mortgage at
8.1%
on the unpaid balance. Equal monthly payments were made to amortize the loan over the
30-year
period. The net market value of the house is now $100,000. After making their
132nd
payment, they applied to the loan company for the maximum loan. How much (to the nearest dollar) will they receive?Amount of loan:
$
(Round to the nearest dollar.)
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