1 Moodle .l ?4:00 PM© 34%moodle.aaup.edu – PrivateQ1: You want to get a mortgage, but can only afford to pay$1200 per quarter. How much can you borrow, if theinterest rate is 5% annually for a 30 year mortgage?Q2: XYZ company had $7 million in (EBIT). Itsdepreciation expense was $2 million, its interest expensewas $2 million, and its corporate tax rate was 35%. At year-end, it had $13 million in current assets, $4 million inaccounts payable, $1.5 million in accruals, and $16 millionin net plant and equipment. Assume that XYZ only noncashitem was depreciation.• What was the company's net income?• What was its net working capital (NWC)?•XYZ had $13 million in net plant and equipment theprior year. Its networking capital has remainedconstant over time. What is the company's free cashflow (FCF) for the year that just ended?• If the firm had $5 million in retained earnings at thebeginning of the year and paid out total dividends of$1.8 million, what were its retained earnings at the endof the year? Assume that all dividends declared wereactually paid.Q3: Sandra considers buying a house. Currently, she rents aplace for €13,500 a year. The current annual interest rate onmortgages is 9%. Her planning period is 30 years. If shedoesn't want to increase his housing costs, what amount ofmortgage is available for his purchase?

Ordinary Annuity: Over a specified period of time, an ordinary annuity is a series of equal payments…

Answered: Q1: You want to get a mortgage, but can…

Q1: You want to get a mortgage, but can only afford to pay $1200 per quarter. How much can you borrow, if the interest rate is 5% annually for a 30 year mortgage?

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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Solve all three parts Q) Suppose you decide to take out the $1 million 30-year fixed rate mortgage at 4%. a) How much money will you pay in interest in the first month (units: dollars)? b) How much principle will you still have left to pay off after making your first 15 years worth of payments (units: thousands of dollars)? c) How much money money will you pay in interest in the 181st payment (units: dollars)?
Problem: Please answer the following questions regarding a $300,000 Mortgage Loan with monthly amortization over 30 years and an annual interest rate of 6%. What is the loan payment for a (30 year loan (360 monthly payments) of $300,000 at 6%? Question Answer What is the monthly payment amount? Loan Monthly Payment: How much interest and how much is principle on the first payment? Interest: Principle: How much interest and how much is principle on the second payment? Interest: Principle: If after the second payment an addition $10,000 was paid on principle. How much would the interest be on the third payment? Interest:
You can afford a $1350 per month mortgage payment. You've found a 30 year loan at 8% interest. a) How big of a loan can you afford? $ 142,944 b) How much total money will you pay the loan company? $ 486,012. X c) How much of that money is interest? $ 343,058.82 X
Many mortgage company allow youto "buy down" your interest rate of your loan by buying points. A point is equal to 1% of your mortgage amount (or $1,000 for every $100,000). You're essentially paying some interest up front in exchange for a lower interest rate over the life of your loan. Find the following payments and total cost (including points) of a $170,000.00 that is borrowed for 30 years with a) 6, % compounded monthly with no points $ The total cost would be $ 1 b) 6– % compounded monthly with 1 point $ 4. The total cost would be $ c) 6% compounded monthly with 2 points $ The total cost would be $
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15. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You've decided to buy a house that is valued at $1 million. You have $300,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $700,000 mortgage, and is offering a standard 30-year mortgage at a 12% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate in percentage form to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a…
You are considering purchasing a new home. You will need to borrow $280,000 to purchase the home. A mortgage company offers you a 20-year fixed rate mortgage (240 months) at 9% APR (0.75% month). If you borrow the money from this mortgage company, your monthly mortgage payment will be closest to: O A. $2,015 В. $3,527 C. $4,030 D. $2,519
3. 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?
What interest rate would it take for a 30 year mortgage to buy a $415,000 house with a $2,000 monthly payment? 3. A) 3.636% 4. B) 4.078% 5. C) 4.276% 6. D) 4.897% N= 360
2. You finance a house purchase with a 20-year mortgage with an effective annual interest rate of 6%. Your first mortgage payment is $30,000 immediately, and subsequent payments decrease by $1,000 each year. What is the purchase value of the house?
ADD-ON LOANS vs SIMPLE INTEREST LOANS. You are borrowing $500,000 on a 30 year, 5.5% interest loan to buy a property. 18a) What will the total interest be if it was an add-on interest loan?18b) How much would the monthly payment be (for 30 years) if it was an add-on interest loan?18c) What will the total interest be if it was a simple interest amortized loan?18d) How much would be the monthly payment (for 30 years) if it was a simple interest amortized loan?

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