Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:You found your dream house. It will cost you $300000 and you will put down $40000 as a down payment.
For the rest you get a 30-year 5.0% mortgage. What will be your monthly mortgage payment in $ (assume no
early repayment)?
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- You found your dream house. It will cost you $300000 and you will put down $45000 as a down payment. For the rest you get a 30-year 4.0% mortgage. What will be your monthly mortgage payment in S (assume no early repayment)?arrow_forwardSuppose you take out a $117,000, 20-year mortgage loan to buy a condo. The interest rate on the loan is 5%. To keep things simple, we will assume you make payments on the loan annually at the end of each year. a. What is your annual payment on the loan? b. Construct a mortgage amortization. c. What fraction of your initial loan payment is interest? d. What fraction of your initial loan payment is amortization? e. What is the total of the loan amount paid off after 10 years (halfway through the life of the loan)? f. If the inflation rate is 3%, what is the real value of the first (year-end) payment? g. If the inflation rate is 3%, what is the real value of the last (year-end) payment? h. Now assume the inflation rate is 6% and the real interest rate on the loan is unchanged. What must be the new nominal interest rate? i-1. Recompute the amortization table. i-2. What is the real value of the first (year-end) payment in this high-inflation scenario? j. What is the real value of the last…arrow_forwardYou are going to buy a house and borrow $542474 with a 30-year mortgage. Your interest rate is 3.37%. What will be your monthly payment? (Remember that you need a monthly "r" and a monthly "t".) Answer:arrow_forward
- 3. Suppose you decide to purchase a $150000 home for $20000 down. A down payment is subtracted from your home’s value and therefore you owe $130000. Well to pay for this amount you will need a loan, so $130000 is the principal on your loan. Suppose the interest rate on a 30 year mortgage is 4.5%. What will your monthly payment be? Create an amortization table for this loan. How much will you pay on the loan if you pay off the loan asarrow_forwardSuppose you are buying your first condo for $250,000, and you will make a $7,500 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at 3.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be? You are not required to show calculations but you must list the inputs used such as N, PV, FV, etc. O $1,000.00 O $1,088.93 O $1,122.61arrow_forwardSuppose you are buying your first home for $144,000, and you have $17,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.40% nominal interest rate, with the first payment due in one month. What will your monthly payments be? Group of answer choices $831.93 $857.64 $753.30 $714.27 $794.39arrow_forward
- Let’s assume that you plan to purchase a house which is selling for $350,000 today. You will make a monthly payment for the next 30 years, with an annual interest rate of 3%. What will be the amount of your monthly mortgage (i.e., home loan) payment? answer choices $1,890.37 $1,400.01 $1,475.61 $1,228.14arrow_forwardI need help solving this on excel 9.You a buying a home for $425,000 and would like to determine the monthly mortgage payment. You can obtain a $340,000 30-year fixed-rate mortgage at 3.5%. What is your monthly payment?arrow_forwardSuppose you are buying a house. You find the perfect one for $215,000. The bank offers you a 30-year fixed rate mortgage with 6.25% interest, compounded monthly. A. If you finance the entire amount (no down payment), what will your monthly payments be? B. Suppose you decide to make a down payment of 20% of the cost of the house. How much is your down payment? C. With the 20% down payment, how much will your monthly payments be? D. How much will you have paid on the mortgage at the end of 30 years in the different situations?arrow_forward
- Answer the following question using a spreadsheet and the material in the appendix. You would like to buy a house. Assume that given your income, you can afford to pay $12,000 a year to a lender for the next 30 years. If the interest rate is 7% how much can you borrow today based on your ability to pay? What about if the interest rate is 3%? Maximum mortgage at 7%: $ Maximum mortgage at 3%: $arrow_forwardYou want to buy a $202,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? $ 181800 b) What will your monthly payments be if the interest rate is 6%? 1089.98 C) What will your monthly payments be if the interest rate is 7%? Submit Questionarrow_forwardDo you want to buy $187,000 home. You plan to pay 20% as a down payment and then take out a 30 year mortgage for the rest. a) how much will the loan amount be? b) what will your monthly payments be if the interest rate is 6% ? c) what will your monthly payments be if the interest rate is 7%?arrow_forward
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