Mike just bought a house for $1.3m. He paid $300k as a down-payment and the rest of the cost has been obtained from a mortgage. The mortgage has a nominal interest rate of 1.8% compounded monthly with a 30-year amortization period. The term (maturity) of the mortgage is 5 years. 1) What are Mike's monthly payments? 2) What does Mike owe at the end of the 5-year term (what is the balance at time 60, B60)?
Q: Why is the short fall calculated with 4 years of deposit please explain as the diagram showing 4…
A:
Q: The market and Stock A have the following probability distributions: Probability Return on market…
A: Data given: Probability Return on Market Return on Stock A 0.2 18% 16% 0.3 12% 14%…
Q: ABC Corporation just paid an annual dividend of $0.75. Analysts expect this dividend to grow at 10%…
A: Present value of stock will be the sum of present value of all future dividends and present value of…
Q: 3) It is known that an investmen 5 000 will increase to 40.000 at the end of 30 ves sum of the…
A: Present value of the future cash flow depends on the interest and time period and cash flow from the…
Q: Blossom Departmental Stores management has forecasted a growth rate of 40 percent for the next two…
A: The concept of dividend discount model will be used here. The dividend discount model is use to…
Q: What are the components of a Federal Formula Grant?
A: Federal Formula Grant - This is a type of U.S. federal grant that defines the exact formula to be…
Q: At a certain ratr of compound interest i an investment of 10,000 will grow to 15,000 at the end of…
A: Future Value = Present Value (1 + r)n where r = interest rate n = time period 15,000 = 10,000 * (1 +…
Q: If a project has a NPV of zero, the project: Has a discounted payback period that is shorter than…
A: Solution:- Net Present Value (NPV) means the net present value of cash inflows from a project…
Q: Consider an amount of 25,000 in a fund today, October 25, 2022. Determine its value on the specified…
A: Simple Interest Interest = Prinicpal amount * Interest rate * Time period Prinicpal amount = 25,000…
Q: Beale Manufacturing Company has a beta of 1, and Foley Industries has a beta of 0.65. The required…
A: Beale Manufacturing Company Beta is 1 Foley Industries beta is 0.65 Market return is 10.5% Risk free…
Q: On January 1, 2024, the Steward's Restaurant decides to invest in Lake Redburgh bonds. The bonds…
A: The bonds are issued either by the government or corporations. The bonds can provide interest…
Q: Madsen Motors's bonds have 24 years remaining to maturity. Interest is paid annually, they have a…
A: Current market price of a bond is the PV of its future coupon and par value. The formula to…
Q: The Sweet Melon Corp. has total 100 shares trading on the market at $20 each.The book value of the…
A: We have select financial information available about the market value of debt and equity of a firm.…
Q: Discuss a warning sign that could result in bankruptcy (either personal or for a business), and what…
A: Bankruptcy- This is a legal procedure of declaring either a person or a business as bankrupt and…
Q: 7. A car dealership offers financing toward the purchase of a Toyota Prius. The dealership's offer…
A: When an amount of money is borrowed by a person it becomes the principal amount of the loan on which…
Q: How might capital rationing conflict with the goal of maximizing shareholders' wealth?
A: Capital rationing means the company has limited capital that must be invested in the most profitable…
Q: Your portfolio is 300 shares of Sabrina, Incorporated. The stock currently sells for $86 per share.…
A: On its ex-dividend date, share price declines by the dividend per share payment announced. Share…
Q: Alex is an investor and he wants to make an investm of $500,000 in to your VR/AR Headset…
A: The following options available for alex to invest in my business is 1. Equity Investment ordinary…
Q: We are evaluating a project that costs $1,830,000, has a 6-year life, and has no salvage value.…
A: Here, To Find: Best-case NPV =? Worst-case NPV =?
Q: They plan to invest in an ordinary annuity that earns 7.2% interest compounded quarterly. Payments…
A: An annuity is a series of regular payments that are provided in exchange for a lump sum amount paid…
Q: Compute the value in 18 years of a $2,000 deposit earning 9 percent per year. (Do not round…
A: To calculate the future value we will use the below formula Future value = PV*(1+r)n Where PV -…
Q: Ann deposits 10,000 into a fund earning an annual simple interest rate of 6%. Mike deposits X into…
A: Ann deposit (P) = 10,000 Interest rate (r) = 0.06 Mike deposit (X) = ? Interest rate (r1) = 0.08…
Q: Calculate the expected value of the scenario. X₁ P(x₁) -$0.25 0.1 SO 0.5 $0.25 0.1 $0.50 0.3
A: Xi P(Xi) $ -0.25 0.1 $ - 0.5 $ 0.25 0.1 $…
Q: 7. A car dealership offers financing toward the purchase of a Toyota Prius. The dealership' offer…
A: Monthly payment includes the amount of principle and Interest. Total amount of installment paid =…
Q: QUESTION 8 Which of the following about conventional finance and behavioural finance is correct? a.…
A: Conventional finance being traditional finance assumes the investor is a rational one and processes…
Q: The personal tax on interest payments is 33%.The personal tax rate on equity capital gain is 15%.The…
A: Information about personal taxes on different instruments of finance had been provided. We have to…
Q: A lender offers you a $125,000, 30 year mortgage with monthly payments of $769.65. What’s the…
A: The lender charges the interest from the borrower in exchange for extending the loan. The borrower…
Q: How many units of each stock will Stephanie buy? Support your response with relevant computations.
A: Given: Particulars Pan Elixir Rebound Cheers Think local Last year dividend $2.50 $0.50 $1.00…
Q: Which of the following is an example of a way in which companies can create value by exploiting real…
A: Company has to take decisions while doing business but decisions must be based on logical and…
Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…
A: Given: Particulars Pan Elixir Rebound Cheers Think local Last year dividend $2.50 $0.50 $1.00…
Q: Which of the following is the correct order of dividend payment process? A.Record Date- Ex-Dividend…
A: Dividends are processed in a chronological order by the company. It determines the timeline for a…
Q: McClelland Corporation agreed to purchase some landscaping equipment from Agri-Products for a cash…
A: We should calculate the present value of payment plan first @ 9% which will be the true cost for…
Q: An investment that would require an initial cash outflow of $360,000 at the beginning is expected to…
A: Data given: Initial cash outflow= $360,000 Cash Inflow= $ 70,000 n= 7 years Required return=13%…
Q: Over the past few years, housing costs have increased at a rate of 6% per year. If this trend were…
A: Future Value refers to the compounded value of a single cash flow received today or multiple cash…
Q: Analyze the dividend policy of RIL for shareholders’ wealth maximization and advise on an optimal…
A: We have to analyze the current dividend policy of Reliance Industries Limited (RIL) and answer…
Q: A friend asks you for a loan of $1,000 and offers to pay you back at the rate of $90 per month for…
A: Monthly interest rate = Annual interest rate/12 = 0.10/12 = 0.008333333 Net present value(NPV) is…
Q: She will require a return of at least 9% on her stock investments and 4% on bond investments.…
A: YTM of bond is yield to maturity is the rate of return realized on bond when held till the maturity…
Q: A new product requires an initial investment of $140,000, and an annual operating expense of…
A: External rate of return (ERR) With present value of all costs and expenses (PVC), future value of…
Q: A lottery winner will receive $6 million at the end of each of the next twelve years. What is the…
A: Annual payment (C) = $6,000,000 Interest rate (r) = 0.086 Number of payments (n) = 12 Future value…
Q: Given the below data, fill in the blank below (WITHOUT SPACES) to calculate the total sales from…
A: SUMIFS is a math or excel formula which is used to find the sum of the criterias set in the…
Q: USE THE FORMULA TO CALCULATE THE MONTHLY PAYMENT FOR THE FOLLOWING: AMOUNT BORROWED INTEREST RATE…
A:
Q: 9.You have a signed a partnership agreement distributing profits based on salary and investment with…
A: Partnership refers to an agreement between a person for running a business and earning as per the…
Q: 3. The total interest expense is half the Net Interest Income that is $225,000 which represent 80%…
A: Total assets are defined as the aggregate value of all things that have economic value and are owned…
Q: Assume that there are three annual paying coupon bonds (Bond X, Y and Z) in issue that all have a…
A: A bond is a debt instrument used to raise capital from investors. A feature of bonds is that the…
Q: ame an Islamic financing product offered from a bank on paskistan. Explain h
A: Islamic products are based on Islamic financing principal and they are slightly different from…
Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…
A: For constant growth (g), current dividend (D) and required rate (r), the intrinsic share price for…
Q: What is the future value in 11 years of $1,000 invested in an account with an APR of 8.9 percent:…
A:
Q: Anu's Amusement Center has collected the following data for operations for the year. Total revenues…
A: Break even point Break even point in terms of number or units is calculated as shown below. Break…
Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…
A: Given: Particulars Pleasant innovation D right Tried Years 20 20 Face value 100 100 1000…
Q: Alpine Luggage has a capacity to produce 420,000 suitcases per year. The company is currently…
A: The fixed costs are those cost that has no relation to the level of activity and remains the same at…
Hi, i know how to solve this question, but i was wondering if it was possible to solve #1 using the effective yearly rate. IE. (1+r/n)^n
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- K Bill and Kim Johnson are purchasing a house for $309,000. Their bank requires them to pay a 10% down payment. The current mortgage rate is 8%, and they are required to pay one point at the time of closing. Determine the total amount Bill and Kim will pay for their house, including principal, interest, down payment, and points (do not include taxes and homeowners' insurance) for the following lengths of their mortgage. a) 10 years b) 20 years c) 30 years CATSuresh buys a house for $794,357.30 with a down payment of $72,214.30 and a mortgage for the balance. The mortgage is for 3 years, and the amortization period is 15 years. Suresh will make weekly payments and the mortgage rate is r(2) = 8.250%. %3D a) How much are the weekly payments? $ 1759.11 b) What is the outstanding balance at the end of the term of the mortgage? $ 702066.58 c) How much does Suresh still owe on the mortgage if he sells the house after 1 years? $ 766044.61Mike just bought a house for $1.3m. He paid $300k as a down-payment and the rest of the cost has been obtained from a mortgage. The mortgage has a nominal interest rate of 1.8% compounded monthly with a 30-year amortization period. The term (maturity) of the mortgage is 5 years. 1) What are Mike's monthly payments? 2) What does Mike owe at the end of the 5-year term (what is the balance at time 60, B₁0)?
- Donelle just purchased a new home with a $400,000 mortgage with a fixed rate of 8.5% (APR) and a 30-year maturity. What are Donelle's monthly payments on the mortgage? O $3,101.69 O $2,833.33 O $2.907,85 $3,075.65Anna is buying a house selling for $235,000. To obtain the mortgage, Anna is required to make a 15% down payment. Anna obtains a 25-year mortgage with an interest rate of 5%. a) Determine the amount of the required down payment. b) Determine the amount of the mortgage. c) Determine the monthly payment for principal and interest Number of Years Rate_% 10 15 20 25 303.0 $9.65067 $6.90582 $5.54598 $4.74211 $4.216043.5 9.88859 7.14883 5.79960 5.00624 4.490454.0 10.12451 7.39688 6.05980 5.27837 4.774154.5 10.36384 7.64993 6.32649 5.55832 5.066855.0 10.60655 7.90794 6.59956 5.84590 5.368225.5 10.85263 8.17083 6.87887 6.14087 5.677896.0 11.10205 8.43857 7.16431 6.44301 5.995516.5 11.35480 8.71107 7.45573 6.75207 6.320687.0 11.61085 8.98828 7.75299 7.06779 6.653027.5 11.87018 9.27012 8.05593 7.38991 6.992158.0 12.13276 9.55652 8.36440 7.71816 7.337658.5 12.39857 9.84740 8.67823 8.05227 7.689139.0 12.66758 10.14267 8.99726 8.39196 8.046239.5…Bill and Kim Johnson are purchasing a house for $252,000. Their Bank requires them to pay a 20% down payment. The current mortgage rate is 10%, and they are required to pay one point at the time of closing. Determine the total amount Bill and Kim will pay for their house, including principal, interest, down payment, and points (do not include taxes and homeowners' insurance) for the following lengths of their mortgage. a) 10 years b) 20 years c) 30 years
- Mr. Abdullah borrows $80,000 at 14 percent interest toward the purchase of a home. His mortgage is for 25 years. How much will his annual payments be? (Although home payments are usually on a monthly basis, we shall do our analysis on an annual basis for ease of computation) 2.How much interest will he pay over the life of the loan (for 25 years)? 3.How much should he be willing to pay to get out of a 14 percent mortgage and into a 10 percent mortgage with 25 years remaining on the mortgage? Assume current interest rates are 10 percent. Carefully consider the time value of money.Dave currently makes monthly payments towards a 25-year mortgage of $290000 with an interest rate of 14.4% compounded monthly.After making the 67th payment, Dave refinanced his mortgage at an interest rate of 8.4% compounded monthly and renegotiated his term. This resulted in Dave's monthly payments being reduced by $700. How large will Dave's final drop payment be? Answer: $NOTE: When calculating a payment or outstanding balance, round appropriately and carry that value through further calculations.Seema takes out a 5 year mortgage for $950,000 at an interest rate of i(52) = 4.875%. The amortization period is 20 years and she will make weekly payments. After 3 years the rate changes to i(52) = 4.500%. What is the outstanding balance at the end of the term (5 years) of the mortgage (taking into account the change in rates!)? a. $784,671.52 b. $706,204.36 c. $761,131.37 d. $753,284.66 e. $745,437.94
- Eric and Mary bought a house 5 years ago. They took out a 30-year mortgage of $350,000 from Royal Bank at that time. The stated interest rate is 6.8% (APR). a. What is the monthly payment of the mortgage? b. What is the outstanding balance of this mortgage as of today? (Assume they have just made their monthly payment and the next payment is due in a month.) c. What is the interest portion of the 61th payment and what is the principal portion in that payment?Dave currently makes monthly payments towards a 25-year mortgage of $290000 with an interest rate of 14.4% compounded monthly. After making the 67th payment, Dave refinanced his mortgage at an interest rate of 8.4% compounded monthly and renegotiated his term. This resulted in Dave's monthly payments being reduced by $700. How large will Dave's final drop payment be? Answer: $ NOTE: When calculating a payment or outstanding balance, round appropriately and carry that value through further calculations.Jimmy buys a piece of property worth $90454, Jimmy makes a down payment of $17541, and pays the remaining portion of the debt with a mortgage consisting of year end payments for the next 18 years. If interest on the mortgage is 5.6% compounded yearly, then in what amount are the payments? Answer: