Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Suppose you want to purchase a home for $525,000 with a 30-year mortgage at 4.84% interest. Suppose also that you can put down 30%. What are the monthly payments? (Round your answer to the nearest cent.) $ What is the total amount paid for principal and interest? (Round your answer to the nearest cent.) $ What is the amount saved if this home is financed for 15 years instead of for 30 years? (Round your answer to the nearest cent.)arrow_forwardif your bank approves a $300,000 mortagage for your new home, at an annual percentage rate of 4.5 % and with a monthly payment of $1800 What will be the remaining mortgage amount after you make 4 monthly paymentsarrow_forwardWhat 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.arrow_forward
- You plan to purchase a $160,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 6.75 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Calculate the amount of interest and, separately, principal paid in the 20th payment c. Calculate the amount of interest and, separately, principal paid in the 150th payment d. Calculate the amount of interest paid over the life of this mortgage. (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. Monthly payment b. Amount of interest Amount of principal C. Amount of interest Amount of principal d. Amount of interest paid Amountarrow_forward1. 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 formulasarrow_forwardYou purchase a cottage for $185,000. You obtain a 30-year, fixed rate mortgage loan at 13.0% after paying a down payment of 30%. Of the second month's mortgage payment, how much is interest and how much is applied to the principal? (Round your answers to the nearest cent.)Interest $________Applied to Principle $__________arrow_forward
- (Annuity payments) To buy a new house, you must borrow $145, 000. To do this, you take out a $145, 000, 20-year, 9 percent mortgage. Your mortgage payments, which are made at the end of each year (one payment each year), include both principal and 9 percent interest on the declining balance. How large will your annual payments be?arrow_forward3. You are purchasing a new home and need to borrow $325,000 from a mortgage lender. The mortgage lender quotes you a rate of 6.5% APR for a 30-year fixed rate mortgage (with payments made at the end of each month). The mortgage lender also tells you that if you are willing to pay one point, they can offer you a lower rate of 6.25% APR for a 30-year fixed rate mortgage. One point is equal to 1% of the loan value. So if you take the lower rate and pay the points, you will need to borrow an additional $3,250 to cover points you are paying the lender. Assuming that you do not intend to prepay your mortgage (pay off your mortgage early), are you better off paying the one point and borrowing at 6.25% APR or just taking out the loan at 6.5% without any points?arrow_forwardYou have just taken out a mortgage of $50,000 for 30 years, with monthly payments at 6% interest. The same day you close on the mortgage you receive a $25,000 gift from your parents to be applied to the mortgage principal. What amount of time will now be required to pay off the mortgage if you continue to make the original monthly payments? What is the amount of the last payment? (Assume any residual partial payment amount is added to the last payment.)arrow_forward
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