Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Please show how to solve this unsing excel and please show all formulas in the spreadsheet.
You decide to buy a house with price of $500,000, You put 20% down payment and consider a 15-year fixed rate mortgage to pay the remaining balance. The lender offers you three choices of the mortgage with monthly payments shown in the table as a., b., and c. Assume that the origination cost is $8,000.
A. If the loan will be outstanding for 15 years, what is the effective cost for each choice? Which choice is most ideal? explain?
B. Which mortgage choices are not properly priced? explain?
Transcribed Image Text:Choice Mortgage Rate
Points
a
7.00%
0.00
b
6.65%
0.30
с
6.50%
5.00
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