The following assumptions are made for each Investigation:The original mortgage is $300,000 amortized over 25 years at 3.99% compounded semi-annuallyUnless otherwise indicated, assume monthly payments are made.Unless otherwise indicated, assume the interest rate remains constant during theamortization period.Your answers can be entered directly on this assignment, but please hand in all rough work aswell.Investigation 1: Shortening the Payment PeriodMost lending institutions allow mortgage payments to be made monthly, bi-monthly (twice amonth) or weekly. Most even allow "accelerated" weekly mortgage payments. With thisoption, the weekly payment is calculated as a monthly payment divided by 4.1. (a) Complete this table for the mortgage defined above. The equivalent interest rate ofinterest for each compounding period has been calculated for you (as discussed insection 6.4 in your text). The Interest saved is the difference between the Total interestpaid for monthly compounding and the Total erest paid for the compounding periodbeing calculated.PaymentFrequency InterestrateMonthly 3.957%Bi-monthly 3.954%Equivalent Number Totalpayments numberper yearpaymentsWeekly 3.952%Accelerated 3.952%weekly11137Payment TotalamountpaidTotalinterestpaidInterestsaved0(b) Explain the result in terms of interest paid when payments are made more often.

Present value is Determined by discounted value of the future cash flows at the present date. Future…

The following assumptions are made for each Investigation: • The original mortgage is $300,000 amortized over 25 years at 3.99% compounded semi- annually • Unless otherwise indicated, assume monthly payments are made. • Unless otherwise indicated, assume the interest rate remains constant during the amortization period. Your answers can be entered directly on this assignment, but please hand in all rough work as well.

The following assumptions are made for each Investigation: • The original mortgage is $300,000 amortized over 25 years at 3.99% compounded semi- annually • Unless otherwise indicated, assume monthly payments are made. • Unless otherwise indicated, assume the interest rate remains constant during the amortization period. Your answers can be entered directly on this assignment, but please hand in all rough work as well.

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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list K Complete the first month of the amortization schedule for a fixed-rate mortgage. Complete parts (a) through (d). Mortgage: $103,000 Interest rate: 5.5% Term of loan: 15 years Click the icon to view the Real Estate Amortization Table. Complete the first payment of the amortization schedule. (Do not round until the final answer. Then round to the nearest cent as needed.) Amortization Schedule Payment Number 1 Total Payment (a) $841.60 Interest Payment ... (b) $472.03 Principal Payment (c) $369.57 Balance of Principal Save (d) $472.03
1. Excel: Complete the amortization table provided in the Excel document posted in Ivylearn in the homework area by setting the appropriate values for a $165,000, 30-year mortgage at 4.5% interest and using Excel's autofill (drag) feature to fill in the cells to the end of the mortgage period. Use this to answer the following: a. How much of the first payment goes towards the principal? How much goes toward the interest? b. How much of the last payment goes towards the principal? How much goes toward the interest? c. Find the total interest paid by the end of the mortgage. d. How much will be owed on the mortgage after making payments for 10 years (hint this is 120 months)? e. How much interest has been paid total on the mortgage at the end of 10 years? f. How many months will it take to pay at least half of the principal?
Using a spreadsheet program, create an amortization schedule for a 30-year mortgage of $500,000 at an annual interest rate of 4.24%. (a) In which month does the amount of principal in a monthly payment first exceed the amount of interest? _____ (b) How much interest is repaid for the term of the loan? (Round your answer to the nearest cent.) _____$ (c) If the loan amount was $750,000 instead of $500,000, would the month in which the amount of principal in a monthly payment first exceeded the amount of interest change?
Given the annual interest rate and a line of an amortization schedule for that loan, complete the next line of the schedule. Assume that payments are made monthly. Annual Interest Rate Payment Interest Paid Paid on Principal Balance 5.4% $289.80 $21.30 $268.50 $4,464.20 Fill out the amortization schedule below. Annual Interest Rate Payment Interest Paid Paid on Principal Balance 5.4% $289.80 $21.30 $268.50 $4,464.20 $______ $_______ $_______ $_____ (Round to nearest cent as needed)
calculate the payment amounts when the mortgage is below are renewed for a second term. Assume interest rates are fixed and compounded semi annually, and that the amortization period is reduced appropriately upon renewal Original Amortization Principal Period (Years) $336,362 First-Term Information Second-Term Information New Payment 25 8.75% 5% 0.00 Monthly payments Weekly payments 3-year term 4-year term $652,731 30 9% 4.75% 0.00 Biweekly payments Biweekly payments 4-year term 4-year term $705,122 20 4.75% 3.75% 0.00 Weekly payments Biweekly payments 3-year term 5-year term
Consider the first payment against a $200,000 mortgage that last for 25 years. Fixed repayments are made on a monthly basis. The first row of the amortization schedule is shown below. Payment # Payment Interest 1 d 716.67 2 Debt Payment Balance P1 b₁
Prepare an amortization schedule for a five-year loan of $47,000. The interest rate is 7% per year, and the loan calls for equal annual payments. (Do not round intermediate calculations. Enter all amount as positive value. Round the final answers to 2 decimal places. Leave no cells blank - be certain to enter "O" wherever required.) Year 1 Beginning Balance $ 2 2 3 4 5 Total Payment $ Interest Payment Principal Payment Ending Balance $ How much interest is paid in the third year? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Interest paid $ How much total interest is paid over the life of the loan? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Total interest $
Prepare an amortization schedule for a three-year loan of $84,000. The interest rate is 9 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan? Note: Leave no cells blank. Enter '0' where necessary. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Year 1 2 3 Beginning Balance Total Payment Total interest Interest Payment Principal Payment Ending Balance
Make an amortization table to show the first two payments for the mortgage. Amount of mortgage Annual interest rate Years in mortgage Monthly payment $407,550 5.25% 35 $2122.29 Month Monthly payment Interest Principal End-of-month principal 1 $2122.29 $enter your response here $enter your response here $enter your response here 2 $2122.29 $enter your response here $enter your response here $enter your response here
Complete the following table: (Use Table 15.1.) Note: Do not round intermediate calculations. Round your answers to the nearest cent. Selling price down payment amount mortgage rate years Monthly paymeny First payment broken down to interest first payment broken down to principal Balance at end of month $236,000 $47,200 7.00% 15 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 4.01651 3.36714 2.750 0.22917 9.54110 6.78622 5.42166 4.61311 4.08241 3.43728 2.875 0.23958 9.59848 6.84586 5.48361 4.67735 4.14892…
Complete the following amortization chart by using Table 15.1. (Round your answers to the nearest cent.) Selling price of home Principal (loan) Payment per $1,000 Monthly mortgage payment Rate of Down payment Years interest 182,000 60,000 6.5 % 35 Σ %24 %24
Given the annual interest rate and a line of an amortization schedule for that loan, complete the next line of the schedule. Assume that payments are made monthly. Annual Interest Rate Payment 6.7% $468.39 Fill out the amortization schedule below. Interest Paid $42.28 Annual Interest Rate 6.7% Interest Paid $42.28 $ (Round to the nearest cent as needed.) Payment $468.39 Paid on Principal $426.11 Paid on Principal $426.11 $ Balance $7,150.14 Balance $7,150.14 $

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