Angie wants to obtain a $500,000 mortgage, amortized over 25 years. Interest rates are currently 8%, compounded twice a year. What is the Effective Annual Interest Rate? a. 7.8698% b. 8.0% O c. 8.4% O d. 8.16% What is the monthly payment on the mortgage? a. $3,776.51 O b. $3,816.07 O c. 3,912.23 O d. $3,666.84
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- Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each year?Ife takes out a 3 year mortgage for $1,125,000 at an interest rate of i(2) = 4.500%. The amortization period is 30 years and she will make weekly payments. What is the outstanding balance at the end of 1 year? O a. $1,084,582.78 O b. $1,106,717.12 O c. $1,029,246.92 O d. $1,040,314.09 e. $1,128,851.46
- 2. Sue borrows $600,000 at 3.85%. The mortgage is for 30 years. A. What is the monthly payment? B. How much interest will be paid over the life of the loan? C. Recalculate the total interest rate if the rate changes from 3.85% to 6.85 %. What is the total interest paid over the life of the 6.85% loan?You obtain a $265,000, 15-year fixed-rate mortgage. The annual interest rate is 6.25 percent. In addition to the principal and interest paid, you must pay $275 a month into an escrow account for insurance and taxes. What is the total monthly payment (to the nearest dollar)? a. $2,272 b. $1,632 c. $2,547 d. $1,907 e. $2,311You obtain a $365,000, 15-year fixed-rate mortgage. The annual interest rate is 7.25 percent. In addition to the principal and interest paid, you must pay $375 a month into an escrow account for insurance and taxes. What is the total monthly payment (to the nearest dollar)? a. $2,547 b. $3,707 c. None of the above d. $2,272 e. $4,311
- You take out a traditional 30 year mortgage for $292,490. It has a fixed interest rate of 4.25% and the payments are made monthly. What is your monthly payment on the mortgage? Oa. $1,286.64 Ob. $1,342.95 c. $1409.11 Od. $1,438.87What is the value accumulated at the end of 30 years if $300 deposited at the end of each month in a mutual fund account that earns 12 percent annually during the period. Ans. A mortgage calls for monthly payments of $970.30, including interest at 7.6 percent. The current value of the mortgage is $95,258.72. Approximately how long will it take to fully amortize the mortgage? Ans. An income-producing property is priced at $550,000 and is expected to generate the following after-tax cash flows: Year 1: $50,000; Year 2: $55,000; Year 3: $60,000 and $600,000. Calculate the annual IRR for this investment opportunity. Ans.Ms. Colonial has just taken out a $150,000 mortgage at an interest rate of 6 percent per year. If the mortgage calls for equal monthly payments for 20 years, what is the amount of each payment? (Assume monthly compounding or discounting.) A. $1,254.70B. $1,625.00C. $1,263.06D. $1,074.65
- Make an amortization table to show the first two payments for the mortgage. Amount of Annual interest rate Years in mortgage Monthly payment mortgage S110,000 5.75% 30 $642.40 Monthly End-of-month Month Interest Principal payment principal 1 $642.40 $642.40 (Round to the nearest cent as needed.) Stephen has just purchased a home for $169,000. A mortgage company has approved his loan application for a 30-year fixed-rate loan at 4.75%. Stephen has agreed to pay 20% of the purchase price as a down payment. Find the total interest Stephen will pay if he pays the loan on schedule. E Click the icon to view the table of the monthly payment of principal and interest per $1,000 of the amount financed. The total interest is S. (Round to the nearest cent as needed.) Stephen has just purchased a home for $161,700. A mortgage company has approved his loan application for a 30-year fixed-rate loan at 4.75%. Stephen has agreed to pay 25% of the purchase price as a down payment. If Stephen made the…Ann is looking for a fully amortizing 30-year Fixed Rate Mortgage with monthly payments for $1,250,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront Assuming Ann makes payments for 30 years, what is Ann's annualized IRR from mortgage A? Ⓒ2.51% 4.51% 4.39% 2.39%1. You have been approved for a mortgage for a property. The mortgage is for a 20-year period with a 7.2% annual interest rate for a total amount of $1,700,000 What is the annual payment if payments are made annually What would you put in your annual cash flow if you were paying the mortgage on a monthly basis? What will be the interest and principal payments for the second and third years of the mortgage? What will be the remaining principal balance at the end of the fifth year? Answer question using excel formulas
