Show steps to calculation in excel Question 4Consider a $5,000,000, 9%, constant payment mortgage (CPM) with monthly payments. What is theregular monthly payment amount and the balloon payment amount in each of the following cases:(a)Fully-amortizing, 30-year loan(b) 30-year amortization, 10-year balloon(c)15-year amortization, 10-year balloon(d)What is the major disadvantage, and advantage, of the 15-year amortization-rate 10-year loan in (c) as compared to the 30-year amortization-rate 10-year loan in (b)?

c). PV = 5,000,000; N (number of payments) = 15*12 = 180; rate (monthly rate) = 9%/12 = 0.75%, solve…

Answered: Question 4 Consider a $5,000,000, 9%,…

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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QUESTION 3 The amortization schedule below is based on a $150,000, 30-year mortgage, financed at 6.01%. It has partially filled in for you. Payment No. Payment Amt. Interest Paid Principal Remaining 150,000.00 Principal Paid SA $149.04 SB a) What would be the value A? b) What would be the value B? c) What is the remaining balance after the second payment?
Calculating the Total Interest Payment for a negative amortizing CPM: $100,000 Mortgage 7% Interest 30 Years Monthly Payments 110% unpaid loan balance at maturity Answer is 217,049.1 but need help with work!!!!
Suppose a homeowner has an existing mortgage loan with these terms: Remaining balance of $150,000, interest rate of 8 percent, and remaining term of 10 years (monthly payments). This loan can be replaced by a loan at an interest rate of 6 percent, at a cost of 8 percent of the outstanding loan amount. Required: a. What is the net benefit of refinancing? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places. b. What is the NPV if the homeowner expects to be in the home for only five more years? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places. a. Net benefit of refinancing b. NPV $ + 6,552.77 1,819.91
QUESTION 1 A bank makes a 30 year Fully Amortizing, Fixed Rate Mortgage (FRM) for $2,000,000 at an annual interest rate of 4.125% compounded monthly, with monthly payments. What is the market value of this loan after 7 years of payments if the annual interest rate for this loan is 10% compounded monthly? O A. $ 680,688.05 O B. $1,045,425.62 OC. $1,726,113.67 O D.$1,101,017.63
Problem 5 You have the following two mortgage choices: Mortgage Amount Term The payment rises each year Discounts Points Costs with Loan Orignation Fixed-rate Mortgage $100,000 3 years with annual PMT 0 $1,000 2/1 Interest-only ARM $100,000 3 years with annual PMT 0 $1,000 Initial Contract Interest Rate 11.00% Margin Caps Market Index Calculate APR for each mortgage choice? 10.00% 2.00% no annual cap; 3% lifetime cap End of Year (EOY) 1: 7.0%; EOY 2: 4.5%
18 .Use the following amortization chart: Selling price of home Down payment Principal (loan) Rate of interest Years Payment per $1,000 Monthly mortgage payment $ 90,000 $ 5,000 $ 85,000 5 1/2% 30 $ 5.67789 $ 482.62 What is the total cost of interest? Note: Do not round intermediate calculations. Round your answer to the nearest cent. Total cost of interest:???
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:
D Question 5 Consider a 3-year, fixed rate mortgage with an original balance of $47,000 and an interest rate of 5%. Suppose right after the month 7 payment has been made, the interest rate declines by 2.3%. If closing and transaction fees add up to 982, then does it make sense to refinance the existing mortgage at this point in time with a new 3-year fixed rate mortgage? If your answer is yes (it makes sense to refinance), then answer 1. Otherwise answer 0.
Spreadsheet problem When paying off a home mortgage, extra principle payments can have a dramatic impact on the time needed to pay off the mortgage. A. create an amortization schedule for a $200,000, thirty-year mortgage, with a 6% APR. B. After the fifth year, add an extra $100 to each monthly payment. When is the loan payed off?
14 In terms of painless less in interest, which is more economical for a $120,000 mortgage: a 30 year fixed rate at 7.5% or a 15 year fixed rate at 7%? how much is saved in interest? use the following formula to determine the regular payment amount. Determine which loan is more economical. Choose the correct answer below. a.The 30 year 7.5% loan is more economical. or b. The 15 year 7% loan is more economical. The buyer will save an interest in proximately $___. (do not run until the final answer. Then round to the nearest thousand dollars)
Use the following amortization chart: Selling price of home Down payment Principal (loan) Rate of interest Years Payment per $1,000 Monthly mortgage payment $ 79,000 $ 6,000 $ 73,000 6% 30 $ 5.9955 $ 437.67 Assume the interest rate rises to 7.5%. What is the total cost of interest with the new interest rate? (Use Table 15.1). Note: Round your intermediate calculations and final answer to the nearest cent. Total cost of interest:???
Use the following amortization chart: Selling price of home Down payment Principal (loan) Rate of interest Years Payment per $1,000 Monthly mortgage payment $ 79,000 $ 6,000 $ 73,000 6% 30 $ 5.9955 $ 437.67 Assume the interest rate rises to 7.5%. What is the total cost of interest with the new interest rate? (Use Table 15.1). Note: Round your intermediate calculations and final answer to the nearest cent. Total cost of interest: ????? The answer is NOT $110,753.57 TABLE 15.1 Amortization table (mortgage principal and interest per $1,000) Rate Interest Only 10 Year 15 Year 20 Year 25 Year 30 Year 40 Year 2.000 0.16667 9.20135 6.43509 5.05883 4.23854 3.69619 3.02826 2.125 0.17708 9.25743 6.49281 5.11825 4.29966 3.75902 3.09444 2.250 0.18750 9.31374 6.55085 5.17808 4.36131 3.82246 3.16142 2.375 0.19792 9.37026 6.60921 5.23834 4.42348 3.88653 3.22921 2.500 0.20833 9.42699 6.66789 5.29903 4.48617 3.95121 3.29778 2.625 0.21875 9.48394 6.72689 5.36014 4.54938…

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