4. You are buying your first house for $140,000, and are paying $25,000 as a down payment. You have arranged a 30-year mortgage and a nominal annual rate of 7%. All payments are made at the end of each month. a. How much of your 4th monthly payment will go toward the repayment of interest? b. How much of your 1st 4 monthly payments will go toward the repayment of principal?
4. You are buying your first house for $140,000, and are paying $25,000 as a down payment. You have arranged a 30-year mortgage and a nominal annual rate of 7%. All payments are made at the end of each month.
a. How much of your 4th monthly payment will go toward the repayment of interest?
b. How much of your 1st 4 monthly payments will go toward the repayment of principal?
5. Your father has $500,000 earned at 8% now, and he wants to retire. How much could he withdraw at the beginning of each of the next 20 years and end up with zero in the account?
Use the following information to answer questions 6 and 7.
6. A 15-year, $1,000 par
7. If the yield to maturity remains at its current rate, what will the price be 10 years from now?
Use the following information to answer questions 8 and 9.
8. Brown Enterprises’ has 9-year, $1,000 par value bonds that have a yield to maturity of 7.6063% and a 8% p.a. coupon rate. The coupon is paid semiannually. The bonds are currently selling for $1025.323. What is their current yield?
9. What is their
Buying a house requires large amount of money. As individuals usually do not have such large sums of money they end up taking loans from banks and financial institutions.
The repayment of loans are made through periodic payments which are fixed or constant in amount.
(Note that you have posted multiple questions in one post and I have answered the first question i.e. question 4 in full – parts a and b – as per Bartleby’s answering guidelines).
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