5. Erin borrowed $200,000 fixed-rate 30-yr mortgage when mortgage rate was 4.5%. How much total interest will she pay if she does not pay off the mortgage earlier? She heard that some house buyers choose to make one extra monthly payment each year so as to pay off their mortgage earlier and therefore reduce the interest payment. Erin decided to do so too. Each year, she will split the extra payment to 12 month so that she pays $1098 per month all the way until paying off the mortgage. Doing so will pay off her mortgage within 307 months instead of 30 years. How much interest will she save? If you were Erin and have extra money, are you financially better off by making extra monthly payment and paying off your mortgage earlier |

5. Erin borrowed $200,000 fixed-rate 30-yr mortgage when mortgage rate was 4.5%. How much total interest will she pay if she does not pay off the mortgage earlier? She heard that some house buyers choose to make one extra monthly payment each year so as to pay off their mortgage earlier and therefore reduce the interest payment. Erin decided to do so too. Each year, she will split the extra payment to 12 month so that she pays $1098 per month all the way until paying off the mortgage. Doing so will pay off her mortgage within 307 months instead of 30 years. How much interest will she save? If you were Erin and have extra money, are you financially better off by making extra monthly payment and paying off your mortgage earlier |

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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Similar questions

Nona purchased a new car earlier today for $24,000. She financed the entire amount with a five-year loan that has a 6 percent interest rate (compounded monthly). a. Compute the monthly payments for the loan. Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value. $ b. How much will Nona owe on the loan after she makes payments for 2 years (i.e., after 24 payments)? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value. $
Emma plans to loan $1,000 to her friend, who will pay a simple interest rate of 5.8% every year for the loan. If no payments are made and no further borrowing occurs between them for 13 years, then how much money will Emma' s friend owe her? $1,061.36 $1,754.00 $2,081.20 $158.00 Now, assume that Emma's friend volunteers to pay compound interest instead of simple interest for her loan. If interest is accrued at 5.8% compounded annually, all other things being equal, how much money will Emma's friend owe her in 13 years? $2,081.20 $1,058.00 $120.71 $ 1,754.00 Emma has another investment option in the market that pays 5.8% nominal interest, but it's compounded quarterly. Keeping everything else constant, how much money will Emma have in 13 years if she invests $1,000 in this fund? $158.00 $129.72 $2,114.01 $1,059.27
Donna wants to buy a house for $900,000.00. She makes a 15% down payment and borrows the rest by getting a 30-year mortgage. Her monthly mortgage payment is $3,803.75. What is the principal of her mortgage? What is the total she will pay on the loan?
arnie and beth litner recently bought a house for $425,000. They put 10% down as a down payment and took out a 15-year fixed mortgage with monthly payments and an interest rate of 6.8%. 1)What is their monthly payment? 2) What proportion(%) of their mortgage payments made during the first five years will be applied to interest?
6. Jake and Archie are looking for places to live. Jake decides to rent a house for $1400 . Archie buys a house for $189 900, with a down payment of 10%. The bank has offered Archie a 20-year mortgage for the remainder of the cost, at 4% compounded semi-annually, with payments every two weeks. Jake and Archie both move after 5 years. Archie's house has depreciated by 2% per year. Compare Jake's and Archie's housing costs. per month.
Nona purchased a new car earlier today for $33,000. She financed the entire amount with a six-year loan that has a 6 percent interest rate (compounded monthly). a. Compute the monthly payments for the loan. Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value. $ b. How much will Nona owe on the loan after she makes payments for 3 years (i.e., after 36 payments)? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value. $ tA
Pat bought a home for $165,000 and made a $25,000 down payment. She got a fixed rate mortgage at 5% for 30 years. What will her payments be? What is the total interest over the life of the loan?
Lashonda wants to buy a new house but needs money for the down payment. Her parents agree to lend her money at an annual rate of 2%, and charged a simple interest. They lend her $6000 for 3 years. She makes no payments except the one at the end of that time. a) how much total interest will lashonda have to pay? b) what will the total repayment amount be (including interest)?
14. Nadia takes out a loan of $150,000 to purchase an apartment. The loan is being charged a yearly interest rate of 2.5% applied monthly. Nadia is paying off the loan by making monthly payments of $500.00. (a) How much of Nadia's first payment goes towards paying interest and how much of it goes towards reducing the initial $150,000 loan amount? Show how you found your answers (b) Did Nadia reduce the loan amount she owed more in the first payment or the second payment? Justify.
Julia has a mortgage on her house with a balance of $150,000 and the APR on the loan is 6%. She is currently paying $1.200 a month on the loan, at this rate how many years will it take to repay the loan?
Scott & Rebecca can afford to pay $4,000.00 each month for a mortgage. Their credit union is offering home loans at 4.375%. If they take out a 30-year mortgage how much can they afford to borrow?
Liz buys a new car for $18,600. She puts 15% down and obtains a simple interest amortized loan for the balance at 6. 25% for 5 years. Find her monthly payment and the total interest paid.

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