Jim has an annual income of $300,000. Jim is looking to buy a house that has monthly property taxes of $1,200 and monthly homeowner's insurance of $300. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 25% and a maximum back end DTI limit of 35%. Jim will make the biggest mortgage payment he can that satisfies both the front end DTI limit and the back end DTI limit. Jim will get a fully amortizing 30 year FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. What is the biggest mortgage loan Jim can get? O A. $1,071,071.25 O B. $139,705.05 OC. $1,973,025.99 OD.$1,409,304.28

Jim has an annual income of $300,000. Jim is looking to buy a house that has monthly property taxes of $1,200 and monthly homeowner's insurance of $300. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 25% and a maximum back end DTI limit of 35%. Jim will make the biggest mortgage payment he can that satisfies both the front end DTI limit and the back end DTI limit. Jim will get a fully amortizing 30 year FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. What is the biggest mortgage loan Jim can get? O A. $1,071,071.25 O B. $139,705.05 OC. $1,973,025.99 OD.$1,409,304.28

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

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Ann Is buying a new home for $365,000. She is choosing between 2 loan options. Loan A is a 15-year mortgage at 5% annual interest with a $25,000 down payment and $2688.70 monthly payment. Loan B is a 30-year mortgage at 4% annual interest with a $10,000 down payment and a $1694.82 monthly payment. Which loan has the lowest total cost? a Loan A is lower cost as it is approximately $111,170 less expensive than Loan B. b Loan B is approximately $87,235 less expensive than Loan A. c Loan B is approximately $52,379 less expensive than Loan A. d Loan A is approximately $102,473 less expensive than Loan B.
You have decided to buy a 3.250 square-feet house in Denton, close to a good public school. The average price in the area is $190 per square feet. The bank will finance 80% of the house value, so you need savings for the 20% down payment You sign a 20-year 3/1 adjustable rate mortgage (ARM), which carries a 3.2% fixed rate for the first 3 years, and then (after 3 years) is adjusted to the 1-year LIBOR +1.25 %. Compute your monthly payments in 3 years (month 37) if the LIBOR is 5% Multiple Choice $3,495 $3,287 $3,580 $3.964
Scott & Rebecca can afford to pay $4,000.00 each month for a mortgage. Their credit union is offering home loans at 4.375%. If they take out a 30-year mortgage how much can they afford to borrow?
Jamie is going to buy some furniture with a single payment loan that is discounted. The loan will be for $5,000 for two years at 10% interest. Calculate the APR on this loan. (Show all work.)
Jamie is going to buy furniture with a single-payment loan that is discounted. The loan will be for $5,000 for 2 years at 10% interest. Calculate the annual percentage rate (APR) on this loan. (Show all work.)
Kate earns an annual salary of $86,000 and rents a condo for $1,650 per month. She has a student loan with a monthly payment of $450. She is considering the purchase of a new vehicle and current financing for new vehicles include an interest rate of 6.75% for a 5-year loan. The lender that she is considering using requires a back-end ratio of 40%. She has saved $4,000 that she would like to put down on the purchase of the vehicle. What is the maximum vehicle cost she can afford?
Seth and Alexandra Moore of Elk Grove Village, Illinois have an annual income of $120,000 and want to buy a home. Currently, mortgage rates are 4.0 percent. The Moores want to take out a mortgage for 30 years. Real estate taxes are estimated to be $5,160 per year for homes similar to what they would like to buy, and homeowner's insurance would be about $1,620 per year. Using a 28 percent front-end ratio, what are the total annual and monthly expenditures for which they would qualify? Round your answers to the nearest dollar. Total annual expenditures $ Monthly expenditures $ Using a 36 percent back-end ratio, what monthly mortgage payment (including taxes and insurance) could they afford given that they have an automobile loan payment of $450, a student loan payment of $350, and credit card payments of $270? (Hint: Subtract these amounts from the total monthly affordable payments for their income to determine the amount left over to spend on a mortgage.) Round your…
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Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
"Jim has an annual income of $240,000. Jim is looking to buy a house with monthly property taxes of $1000 and monthly homeowner s insurance of $200. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 28% and a maximum back end DTI limit of 36%. Considering both the front end DTI limit and the back end DTI limit, what is the most they will allow Jim to spend on a monthly mortgage payment?"
Chris can afford to pay $2,250 per month for a mortgage to buy a home. The bank will charge him 6.75% for a 30 year loan. How much can Chris borrow to buy a home? Multiple Choice $28,636 $2,613,298 $346,902 $810,000
Mateo and Klaus have now saved up their down payment to buy a home, but they still need to borrow to cover the rest. For the home they want this will require a mortgage of $585,000 to cover the remaining amount and they're not sure whether they could afford the monthly loan payments. The bank has offered them a mortgage interest rate of 5.15%, compounded semi-annually. How much would they have to be able to afford to pay each month in order to pay off their mortgage in 25 years? [Blank-1]What is the total amount of interest that would be paid to the lender after 25 years of payments? [Blank-2]What if Mateo and Klaus could only afford a monthly payment of $2,500? What would be the maximum mortgage amount they could afford to borrow from the bank, if all the other conditions were the same? [Blank-1]What is the total amount of interest that would be paid to the lender over 25 years? [Blank-2]

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