FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- A floating rate mortgage loan is made for $195,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,560. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,560? Complete this question by entering your answers in the tabs below. Required A Required B What will be the loan balance at the end of year 1? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Loan balancearrow_forwardYou took out a fixed interest rate mortgage loan with an initial loan balance of $260,000, an annual nominal interest rate of 3.30%, and monthly payments based on a 30-year amortization schedule. Your mortgage lender charged a loan origination fee of $1,150 at closing. Assuming the loan is outstanding for the full term, what is the estimate for the annual effective cost of borrowing. 28% 0.28% 3.30% 3.34%arrow_forwardUse Excel to create an annual summary (5-years) amortization schedule for a fully-amortizing, fixed rate mortgage for $4,000,000 at 5.5% for 30 years, monthly payments, 1 discount point. Use the power of Excel. Show me the excel table. (Picture/Screenshot/Table)arrow_forward
- Please include the excel formula If the following is a loan, identify a) the principal amount, b) the monthly interest rate, and c) the length of the loan in months. Determine if the following situation is an investment or a loan. If the following is an investment, identify a) if it is a one-time or recurring investment, b) the number of compounding periods per year and c) the total number of compounding periods. If the following is a loan, identify a) the principal amount, b) the monthly interest rate, and c) the length of the loan in months. Ashtyn purchased new appliances for her house for a total of $5,744. The store she buys the appliances from offers an annual simple interest rate of 8.5% with no down payment and monthly payments for 3 years. This situation represents a(n) . a) b) c) What will be your monthly payments? Use Excel to calculate the value.arrow_forwardA fully amortizing mortgage loan is made for $84,000 at 6 percent interest for 25 years. Payments are to be made monthly. Required: a. Calculate monthly payments. b. Calculate interest and principal payments during month 1. c. Calculate total principal and total interest paid over 25 years. d. Calculate the outstanding loan balance if the loan is repaid at the end of year 10. e. Calculate total monthly interest and principal payments through year 10. f. What would the breakdown of interest and principal be during month 50?arrow_forwardYou borrow $2,400 to pay for a Caribbean vacation and will pay it off over 2 years with regular monthly What is the regular payment if interest is charged on the loan amount at APR of 8% interest is charged monthly on the balance still Create an amortization table for this loan on Excel What is the total amount of payments made in part a.? What is the total interestarrow_forward
- Please make sure the answers are clear n easy to read. Please do it on white paper. Again make sure the answer is clear. do it on white paperarrow_forwardA floating rate mortgage loan is made for $180,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,440. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,440? Complete this question by entering your answers in the tabs below. Required A Required B If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,440? Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Loan balance in year 2 Interest accrued - Year 2 Interest accrued - Years 2 - Year 5arrow_forwardI need help with this problemarrow_forward
- A borrower has two alternatives for a loan: (1) issue a $300,000, 120-day, 8% note or (2) issue a $300,000, 120-day note that the creditor discounts at 8%. Assume a 360-day year. a. Calculate the amount of the interest expense for each option.$ for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $300,000, 120-day, 8% interest-bearing note $ (2) $300,000, 120-day note discounted at 8% $ c. Alternative is more favorable to the borrower because the borrower .arrow_forwardNeed Detailed answer with steps please 30. Considering the following information, what is the NPV if the borrower refinances the loan? Expected holding period: 3 years, Current loan balance: $100,000; Current loan interest: 7%; Current loan mortgage payment: $898.33; Remaining term on current mortgage: 15 years; New loan interest: 5.5%; New loan mortgage payment: $817.08; New loan term: 15 years; Cost of refinancing: $5,000. Assume that the opportunity cost is the interest rate on the new loan (5.5%). A. -$5,000.00 B. -$1,155.27 C. $3,844.73 D. $8,844.73arrow_forwardConsider a 30-year, 8.5% loan for $130,000 with fixed monthly payments. Construct an amortization schedule for the following payment numbers: 1, 24, 60, 120, 180, 240 and 360.arrow_forward
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