A 30-year fully amortizing mortgage loan was made 10 years ago for $75,000 at 6 percent interest. The borrower would like to prepay the mortgage balance by $10,000. Required: a. Assuming he can reduce his monthly mortgage payments, what is the new mortgage payment? b. Assuming the loan maturity is shortened and using the original monthly payments, what is the new loan maturity?

A 30-year fully amortizing mortgage loan was made 10 years ago for $75,000 at 6 percent interest. The borrower would like to prepay the mortgage balance by $10,000. Required: a. Assuming he can reduce his monthly mortgage payments, what is the new mortgage payment? b. Assuming the loan maturity is shortened and using the original monthly payments, what is the new loan maturity?

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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Consider a home mortgage of $125,000 at a fixed APR of 4.5% for 25 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest. ..... a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.)
Suppose that a house was purchased with the buyer taking out a 20 year,$350,000 mortgage at 3% interest compounded monthly.(i) What will the monthly payments be?(ii) Find the total amount of interest paid when the loan is amortized over 20 years.
Imagine you get a $450,000 closed floating rate mortgage (no CMHC needed) having a three-year term and amortized over 25 years. Although the interest rate on the mortgage would change, your monthly payments would remain fixed for the term. Monthly payments would be calculated based on APR of %4.8 compounded monthly and amortization period of 25 years. The actual amount of the interest accrued will be deducted from your fixed monthly payments and the rest would be used for principal repayment. Now, assume that the floating rate itself is 4.2% for the first 6 months, then suddenly jumps to 6% for the next 12 months, then drops to 3.6% for the next 6 months, and then declines to 3% for the final 12 months. Note that all rates are quoted as an APR and compounded monthly. Part A: How much money do you owe (i.e. what is the outstanding balance) after 18 months? Part B: How much interest did you pay over the term of the mortgage? How much was principal?
Please eolve this question on excell and show formulas please.
Assume we have a $500,000 mortgage at a 3.5% original interest rate, 30-year term, and monthly payments. The interest rate can be adjusted at the end of each year, and we assume the rate increases by 0.25% after the first year. What is the monthly payment for the 4th year of the loan?
Use chart.
5) You have a 25-year $800,000 mortgage that you make monthly payments on. The quoted rate of is 4.54% compounded semi-annually. Show the amortization table for the first 3 payments. How much interest payments have you done after the first 3 payments. What is the balance of the loan at the end of year 12?
Problem: You are interested in a fixed-rate mortgage for $399,000 and need to choose the between options: a 15-year mortgage or a 30- year mortgage. The current mortgage rate is 3.75% for the 15-year mortgage, and 3.25% for the 30-year mortgage. Both require a 15% down payment. (Hint: make use of the amortization formula from Chapter 12). (a) What are the monthly principal and interest payments for EACH loan? Show your work. (b) What is the total amount of interest paid on EACH loan? Show your work. (c) Overall, how much more interest is paid by choosing the 30-year mortgage? Show your work.
basic ARM is made for $220,000 at an initial interest rate of 6 percent for 30 years with an annual resetdate. The borrower believes that the interest rate at the beginning of year (BOY) 2 will increase to 7 percent. Required:a. Assuming that a fully amortizing loan is made, what will the monthly payments be during year 1? b. Based on (a) what will the loan balance be at the end of year (EOY) 1? c. Given that the interest rate is expected to be 7 percent at the beginning of year 2, what will the monthlypayments be during year 2? d. What will be the loan balance at the EOY 2 ? e. What would be the monthly payments in year 1 if they are to be interest only?
Consider a 4-year amortizing loan. You borrow $2,400 initially and repay it in four equal annual year-end payments. a. If the interest rate is 10%, what is the annual payment? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual payment $ ✓Answer is complete and correct. Time b. Prepare an amortization schedule. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. 1 2 3 4 Loan Balance (S) 2,400.00 2,400.00 757.13 1,882.87 x 1,314.03 688 Answer is complete but not entirely correct. Year-End Interest Due on Loan Balance (5) 240.00 188.29 131.40 68.83 Total Year- End Payment ($) 10 757.13 757.13 757.13 757.13 Amortization of Loan (S) 0 517.13 568.84 625.73 688.30

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