Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
3rd Edition
ISBN: 9780133507676
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Textbook Question
Chapter 5, Problem 27P
Your firm has taken out a $500,000 loan with APR (compounded monthly) for some commercial property. As is common in commercial real estate, the loan is a five-year loan based on a 15-year amortization. This means that your loan payments will be calculated as if you will take 15 years to pay off the loan, but you actually must do so in five years. To do this, you will make 59 equal payments based on the 15-year amor- tization schedule and then make a final 60th payment to pay the remaining balance.
a. What will your monthly payments be?
b. What will your final payment be?
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Your firm has taken out a $535,000 loan with 8.6% APR (compounded monthly) for some commercial property. As is common in commercial real estate, the loan is a 5-year loan based on a 15-year amortization. This means that your loan payments will be calculated as if you will take 15 years to pay off the loan, but you actually must do so in 5 years. To do this, you will make 59 equal payments based on the 15-year amortization schedule and then make a final 60th payment to pay the remaining balance. (Note: Be careful not to round any intermediate steps less than six decimal places.)
a. What will your monthly payments be?
b. What will your final payment be?
a. What will your monthly payments be?
The monthly payments will be $______ (Round to the nearest cent.)
Part 2
b. What will your final payment be?
The final payment will be $______ (Round to the nearest cent.)
Your firm has taken out a $527,000 loan with 8.5% APR (compounded monthly) for some commercial property. As is common in commercial real estate, the loan is a 5-year loan based on a 15-year amortization.
This means that your loan payments will be calculated as if you will take 15 years to pay off the loan, but you actually must do so in 5 years. To do this, you will make 59 equal payments based on the 15-year
amortization schedule and then make a final 60th payment to pay the remaining balance. (Note: Be careful not to round any intermediate steps less than six decimal places.)
a. What will your monthly payments be?
b. What will your final payment be?
a. What will your monthly payments be?
The monthly payments will be $
(Round to the nearest cent.)
(...)
Your firm has taken out a $537,000 loan with 8.2% APR (compounded monthly) for some
commercial property. As is common in commercial real estate, the loan is a 5-year loan based
on a 15-year amortization. This means that your loan payments will be calculated as if you will
take 15 years to pay off the loan, but you actually must do so in 5 years. To do this, you will
make 59 equal payments based on the 15-year amortization schedule and then make a final
60th payment to pay the remaining balance. (Note: Be careful not to round any intermediate
steps less than six decimal places.)
a. What will your monthly payments be?
b. What will your final payment be?
a. What will your monthly payments be?
The monthly payments will be $
(Round to the nearest cent.)
b. What will your final payment be?
The final payment will be $
(Round to the nearest cent.)
Chapter 5 Solutions
Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
Ch. 5 - Prob. 1CCCh. 5 - Prob. 2CCCh. 5 - Prob. 3CCCh. 5 - Prob. 4CCCh. 5 - What is the difference between a nominal and real...Ch. 5 - How are interest rates and the level of investment...Ch. 5 - Prob. 7CCCh. 5 - Prob. 8CCCh. 5 - Prob. 1CTCh. 5 - Why is the EAR for 6% APR, with semiannual...
Ch. 5 - Prob. 3CTCh. 5 - Prob. 4CTCh. 5 - Prob. 5CTCh. 5 - Prob. 6CTCh. 5 - Prob. 7CTCh. 5 - Prob. 8CTCh. 5 - Prob. 9CTCh. 5 - Your bank is offeringyou an account that will pay...Ch. 5 - 3. You are looking to buy a car and you have been...Ch. 5 - 4. You are considering two ways of financing a...Ch. 5 - 6. Which do you prefer: a bank account that pays...Ch. 5 - 7. You have been offered a job with an unusual...Ch. 5 - You have found three investment choices for a...Ch. 5 - 9. Your bank account pays interest with an EAR of...Ch. 5 - 10. Suppose the interest rate is 8% APR with...Ch. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - 14. Suppose Capital One is advertising a 60-month,...Ch. 5 - Ironwood Bank is offeringa30-year mortgage with an...Ch. 5 - 17. You have just taken out a $20,000 car loan...Ch. 5 - 19. You are buying a house and the mortgage...Ch. 5 - 20. You have decided to refinance your mortgage....Ch. 5 - 21. You have just sold your house for $1,000,000...Ch. 5 - Prob. 18PCh. 5 - 23. You are thinking about leasing a car. The...Ch. 5 - 24. You have some extra cash this month and you...Ch. 5 - 25.You have an outstanding student loan with...Ch. 5 - 25. You have an outstanding student loan with...Ch. 5 - 27. Oppenheimer Bank is offering a 30-year...Ch. 5 - 28. Your friend tells he has a very simple trick...Ch. 5 - 29. The mortgage on your house is five years old....Ch. 5 - Prob. 26PCh. 5 - Your firm has taken out a $500,000 loan with APR...Ch. 5 - 32. Five years ago you took out a 5/1 adjustable...Ch. 5 - 33. In 1975, interest rates were 7.85% and the...Ch. 5 - 34. If the rate of inflation is 5%, what nominal...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - 37. You are pleased to see that you have been...Ch. 5 - 38. What is the shape of the yield curve given in...Ch. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37P
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