6. You are taking out a $100,000 mortgage loan to be repaid over 25 years in 300 monthly payments. a. If the interest rate is 16% per year, what is the amount of the monthly payment? b. If you can only afford to pay $1,000 per month, how large a loan could you take? c. If you can afford to pay $1,500 per month and need to borrow $100,000, how many months would it take to pay off the mortgage?
6. You are taking out a $100,000 mortgage loan to be repaid over 25 years in 300 monthly payments. a. If the interest rate is 16% per year, what is the amount of the monthly payment? b. If you can only afford to pay $1,000 per month, how large a loan could you take? c. If you can afford to pay $1,500 per month and need to borrow $100,000, how many months would it take to pay off the mortgage?
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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Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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Transcribed Image Text:6. You are taking out a $100,000 mortgage loan to be repaid over 25 years in 300
monthly payments.
a. If the interest rate is 16% per year, what is the amount of the monthly payment?
b. If you can only afford to pay $1,000 per month, how large a loan could you take?
c. If you can afford to pay $1,500 per month and need to borrow $100,000, how
many months would it take to pay off the mortgage?
d. If you can pay $1,500 per month, need to borrow $100,000, and want a 25-year
mortgage, what is the highest interest rate you can pay?
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