Please show how to solve this using excel and please show all formulas in the spreadsheet please!! Thomas decides to buy a house with price of $450,000. Thomas puts 20% down payment and considers a 30-year fixed rate mortgage to pay the remaining balance. The lender offers Thomas two choices of the mortgage with monthly payments shown in the table as choice 1 and choice 2, assume that the origination cost is $6,000. A. If you hold the loan for 30 years, what is the effective cost for each choice? B. How about the effective cost for each choice if the loan will only be outstanding for 5 years (60 months) (i.e. the borrow will pay off the loan at the end of 60 months)?
Please show how to solve this using excel and please show all formulas in the spreadsheet please!! Thomas decides to buy a house with price of $450,000. Thomas puts 20% down payment and considers a 30-year fixed rate mortgage to pay the remaining balance. The lender offers Thomas two choices of the mortgage with monthly payments shown in the table as choice 1 and choice 2, assume that the origination cost is $6,000. A. If you hold the loan for 30 years, what is the effective cost for each choice? B. How about the effective cost for each choice if the loan will only be outstanding for 5 years (60 months) (i.e. the borrow will pay off the loan at the end of 60 months)?
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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Please show how to solve this using excel and please show all formulas in the spreadsheet please!!
Thomas decides to buy a house with price of $450,000. Thomas puts 20% down payment and considers a 30-year fixed rate mortgage to pay the remaining balance. The lender offers Thomas two choices of the mortgage with monthly payments shown in the table as choice 1 and choice 2, assume that the origination cost is $6,000.
A. If you hold the loan for 30 years, what is the effective cost for each choice?
B. How about the effective cost for each choice if the loan will only be outstanding for 5 years (60 months) (i.e. the borrow will pay off the loan at the end of 60 months)?
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