You have just negotiated a home mortgage with a principal of $350,000. The bank's quoted rate is 6.3%. You chose a 20-year amortization and you decide to make 12 payments per year. Each mortgage payment is $2,551.90. How much interest do you pay in the first year? Express your answer as a percentage of the total value of your mortgage payments in the first year. The interest as a percentage of the total payments in year 1 is 71.1825 %. (Round to four decimal places as needed.)

You have just negotiated a home mortgage with a principal of $350,000. The bank's quoted rate is 6.3%. You chose a 20-year amortization and you decide to make 12 payments per year. Each mortgage payment is $2,551.90. How much interest do you pay in the first year? Express your answer as a percentage of the total value of your mortgage payments in the first year. The interest as a percentage of the total payments in year 1 is 71.1825 %. (Round to four decimal places as needed.)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

See similar textbooks

Similar questions

← You have just negotiated a home mortgage with a principal of $350,000. The bank's quoted rate is 6.3%. You chose a 20-year amortization and you decide to make 12 payments per year. Each mortgage payment is $2,551.90. How much interest do you pay in the first year? Express your answer as a percentage of the total value of your mortgage payments in the first year. The interest as a percentage of the total payments in year 1 is %. (Round to four decimal places as needed.)
You plan to purchase a $310,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 5.10 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. (1) Construct the amortization schedule for the mortgage. b. (2) How much total interest is paid on this mortgage?
You are a loan officer trying to structure a 5/25 ARM mortgage. The interest rate in the first 5 years is 4.68% per year. From year 6, it will be adjusted annually. Assume in year 6, the prevailing interest rate will be 7.78%. Your client is buying a house for 350,000 and plans to pay 20% of the purchase price down payment. What will the monthly payment in year 6 be?
You have just purchased a home and taken out a $500,000 mortgage. The mortgage has a 30-year term with monthly payments and an APR of 6%. How much will you pay in interest, and how much will you pay in principal, during the first year?
Suppose 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…
You have just purchased a home and taken out a $550,000 mortgage. The mortgage has a 30-year term with monthly payments and an annual percentage rate (APR) (with semi-annual compounding) of 6.80%. (Note: Be careful not to round any intermediate steps less than six decimal places.) a. How much will you pay in interest, and how much will you pay in principal, during the first year? b. How much will you pay in interest, and how much will you pay in principal, during the twentieth year (i.e., between 19 and 20 years from now)? a. How much will you pay in interest, and how much will you pay in principal, during the first year? During the first year, you will pay an interest payment of $ (Round to the nearest dollar.) During the first year, you will pay a principal payment of $ (Round to the nearest dollar.)
You buy a house for $1,200,000 using a 30-year mortgage. The annual interest rate is 3%. Payments are made at the beginning of the time period. What is the total principal paid over the 20 year life of the mortgage?
You plan to purchase an $80,000 house using a 15-year mortgage obtained from your local bank. The mortgage rate offered to you is 8.00 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage.b. Calculate the amount of interest and, separately, principal paid in the 127th payment.c. Calculate the amount of interest and, separately, principal paid in the 159th payment.d. Calculate the amount of interest paid over the life of this mortgage.
You plan to purchase a $320,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 5.20 percent. You will make a down payment of 15 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. (1) Construct the amortization schedule for the mortgage. b. (2) How much total interest is paid on this mortgage? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B1 Amortization Schedule Month 1 2 3 179 180 Construct the amortization schedule for the mortgage? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Req 82 Total Interest Amortization Schedule for the 15-Year Mortgage Interest Cumulative Principal Principal 272,000.00 270,999.26 Cumulative Interest Ending Balance
You are getting a mortgage. Your home is worth $237,324, and you will make a $63,651 down payment. You have arranged to finance the remainder with a 27-year, monthly payment mortgage at a 8% nominal interest rate, with the first payment due in one month. What are your monthly payments?
You plan to use a 15 year mortgage obtained from a local bank to purchase a house worth $124,000.00. The mortgage rate offered to you is 7.75%. You will make a down payment of 20% of the purchase price. a. Calculate your monthly payments on this mortgage. List in a spreadsheet the cash flow the bank expects to receive from you. Submit the spreadsheet with your answers. b. Calculate the amount of interest and principal for the 60th payment. Show your work. c. Calculate the amount of interest and principal to be paid on the 180th payment. Show your work. d. What is the amount of interest paid over the life of this mortgage?
You plan to purchase a $350,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 5.50 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the mortgage. How much total interest is paid on this mortgage? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))