2. Ms. Bayer comes to your bank, Bank of America (BOA), to ask for advice on a planned housepurchase. Her annual salary is $60,000.BOA does not charge a fee (just assume this; it is not true in the real world) on housing loans, and itallows a custom's monthly mortgage payment to be equal to 30% of the customer's monthly salary(before-tax).For a 30-year fixed-rate loan with an interest rate of 12%, compounded monthly, answer thefollowing two questions: (1) how much (the maximum amount) can BOA lend to Ms. Bayer? (2)To finance the purchase of a house, BOA requires that the home buyer come up with a 20% downpayment. Assume Ms. Bayer can make the 20% down payment. Based on the maximum loanamount, what is the maximum price of a house Ms. Bayer can buy?3. Refer to the previous problem, work out an amortization table (similar to that on Slide 4.55) forthe 360 periods. Briefly discuss what you observe from the results. Turn in the Excel file. Name= HW 2 CH 4 Clinton Ford Obama.xls.

Since you have posted multiple questions, we will provide the solution only to the first question as…

Answered: 2. Ms. Bayer comes to your bank, Bank…

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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Review the following scenario. Identify how much each lienholder would receive. Mrs. Smith takes out a $450,000 mortgage loan to construct her home. Unfortunately she loses her job and defaults on her payments, leading the lender to foreclose on her house. The lender only receives $375,000 at the foreclosure option. (Enter answers using exactly this format "$x,xxx.xx") $350,000 filed by mortgage lender in 2016 $20,000 filed by Court for lawsuit in 2012 $15,000 filed in 2018 for property taxes $10,000 filed by a contractor in 2014
Your brother is considering the purchase of a home rather than renewing the lease on his two-bedroom apartment. He is currently paying $800 per month for rent. He has asked you to help decide what sort of home he might be able to afford with his current monthly rent payment. His bank offers first-time home buyers (with good credit) a 25-year mortgage at a fixed rate of 8.95%. Use this information to answer the questions below. Express your answers rounded correctly to the nearest cent! () If the cost of insurance and property taxes is about $290 per month in the neighborhood where he'd like to live, what monthly mortgage payment can he afford? (Refer to your class notes for the formula.) Payment = $ 650 (i) Use Excel's P function to determine how much your sister could afford to borrow for a home. Amount to Borrow $ 629.9
Guillermo wants to buy a house that is for sale for $ 70,000.The bank lends you 65% of the sale price and will charge 5% asmortgage payment. He will also need to pay $ 350 for feesLegal, S580 for property taxes. $ 280 for feesregistration and $ 500 for fire insurance. What mortgage charge goesto turn off?
Asher wants to buy a car that costs $29,660. He qualifies for a 4-year loan at a 2.8% annual interest rate, and he can afford a $500 monthly payment. What minimum down payment must Asher make to keep his monthly payment at or below $500? Round your answer to the nearest dollar. $6,980 $20,325 $22,680 $9,336
2. Jeffrey purchased a new car. He wishes to set aside enough money in a bank account to pay maintenance on the car for the first 5 years. It has been estimated that the maintenance cost is as follows: Yegr Maintenance Cost 1 P6720 8400 3 10,080 4 11,760 13,440 Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should Jeffrey deposit in the bank now?
5 . Please answer the whole answer there is more than one answer that needs to be answered
Bha
Mary wants to buy a new car but needs money for the down payment. Her parents agree to lend her money at an annual rate of 5%, charged as simple interest. They lend her s7000 for 3 years. She makes no payments except the one at the end of that time. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Mary have to pay? (b) What will the total repayment amount be (including interest)?
a
Alan and Samantha Brown have a mortgage with the Bank of America. The bank requires the Browns to pay their homeowner's insurance, property taxes, and mortgage in one monthly payment to the bank. Their monthly mortgage payment is $1,450.30, their semi-annual property tax bill is $6,470, and their annual homeowner's insurance bill is $980. How much is the monthly payment they make to Bank of America?
You are down on your luck and need a loan, quick! You locate Mr. Loa N. Shark who advertises weekly loans for “an almost imperceptibly small rate” of only 3%, prepaid at the time of the loan. You sign over your federal tax refund for $1,000 to Mr. Shark, with proof that it is correct and will be forth coming from the IRS in one week. Solve, a. How much money does Mr. Shark hand you? b. How much weekly interest are you really paying? c. What is the nominal annual interest rate? d. What is the effective annual interest rate?
Your mother received an offer from a bank. The flier is offering your mother to open a credit card with that bank. The advertised rate on the flier is only 15%, which is considerably lower compared to other rates offered by competing banks. Then, in the fine print, it said that interest is paid monthly. Your mother asked you what that meant or what would be the effect of that if any. What would you tell her? Compute for the EFF %. How would you explain to her why there is a difference between the 15% and the rate that you computed? Dont use excel

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