The number of years required to pay off the complete mortgage. Introduction: A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

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Answer 1

Question

Chapter 5, Problem 21P

a)

Summary Introduction

To determine: The number of years required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

b)

Summary Introduction

To determine: The number of months required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

c)

Summary Introduction

To determine: Does the given strategy vary with rate of interest on loan.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually owns the property.

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Your friend tells you he has a very simple trick for taking one-third of the time it takes to repay your mortgage: Use your holiday bonus to make an extra payment on January 1 of each year (that is, pay your monthly payment due on that day twice). Assume that the mortgage has an original balance of $100,000, has an original term of 30 years, and has an APR of 12.0%. a. If you take out your mortgage on January 1 (so that your first payment is due on February 1), and you make your first extra payment at the end of the first year, in what year will you finish repaying your mortgage? b. If you take out your mortgage on July 1 (so that the first payment is on August 1), and you make the extra payment each January, in how many months will you pay off your mortgage? c. How will the amount of time it takes to pay off the loan given this strategy vary with the interest rate on the loan? Note: Make sure to round all intermediate calculations to at least 6 decimal places. ... a. If you take out…

You have just taken out a mortgage of $50,000 for 30 years, with monthly payments at 6% interest. The same day you close on the mortgage you receive a $25,000 gift from your parents to be applied to the mortgage principal. What amount of time will now be required to pay off the mortgage if you continue to make the original monthly payments? What is the amount of the last payment? (Assume any residual partial payment amount is added to the last payment.)

You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your current mortgage. The current monthly payment is$1,850and you have made every payment on time. The original term of the mortgage was 30 years, and the mortgage is exactly four years and eight months old. You have just made your monthly payment. The mortgage interest rate is 6.375%(APR). How much do you owe on the mortgage today? (Note: Be careful not to round any intermediate steps less than six decimal places.)

Answer 2

Question

Chapter 5, Problem 21P

a)

Summary Introduction

To determine: The number of years required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

b)

Summary Introduction

To determine: The number of months required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

c)

Summary Introduction

To determine: Does the given strategy vary with rate of interest on loan.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually owns the property.

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Answer 3

Question

Chapter 5, Problem 21P

a)

Summary Introduction

To determine: The number of years required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

b)

Summary Introduction

To determine: The number of months required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

c)

Summary Introduction

To determine: Does the given strategy vary with rate of interest on loan.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually owns the property.

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Answer 4

Question

Chapter 5, Problem 21P

a)

Summary Introduction

To determine: The number of years required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

b)

Summary Introduction

To determine: The number of months required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

c)

Summary Introduction

To determine: Does the given strategy vary with rate of interest on loan.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually owns the property.

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Answer 5

Chapter 5, Problem 21P

a)

Summary Introduction

To determine: The number of years required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

b)

Summary Introduction

To determine: The number of months required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

c)

Summary Introduction

To determine: Does the given strategy vary with rate of interest on loan.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually owns the property.

Answer 6

Chapter 5, Problem 21P

a)

Summary Introduction

To determine: The number of years required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

Answer 7

Chapter 5, Problem 21P

a)

Summary Introduction

To determine: The number of years required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

Answer 8

b)

Summary Introduction

To determine: The number of months required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

Answer 9

b)

Summary Introduction

To determine: The number of months required to pay off the complete mortgage.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually own the property.

Answer 10

c)

Summary Introduction

To determine: Does the given strategy vary with rate of interest on loan.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually owns the property.

Answer 11

c)

Summary Introduction

To determine: Does the given strategy vary with rate of interest on loan.

Introduction:

A mortgage may be a certificate of debt, secured by the collateral of the given property the receiver is obligated to pay back with a planned set of payments while not paying the whole price of acquisition up front. The receiver repays the loan and interest, till he eventually owns the property.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 5.1 - Prob. 1CC Ch. 5.1 - Prob. 2CC Ch. 5.2 - How can you compute the outstanding balance on a...Ch. 5.2 - What is an amortizing loan?Ch. 5.3 - What is the difference between a nominal and real...Ch. 5.3 - How do investors expectations of future short-term...Ch. 5.4 - Prob. 1CC Ch. 5.4 - How do taxes affect the interest earned on an...Ch. 5.5 - What is the opportunity cost of capital?Ch. 5.5 - Why do different interest rates exist, even in a...

Solution Summary: The author explains how Person X restricts the time for repayment of mortgage by one-third.

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