A borrower and lender agree on a negative-amortizing loan in the amount of $300,000 at 4% interest for 30 years. The amount due at maturity will be $350,000. Calculate the loan balance after 20 years.

A borrower and lender agree on a negative-amortizing loan in the amount of $300,000 at 4% interest for 30 years. The amount due at maturity will be $350,000. Calculate the loan balance after 20 years.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 7FPE: Calculating interest and APR of installment loan. Assuming that interest is the only finance charge,...

See similar textbooks

Related questions

Q: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13…

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: An interest-only ARM is made for $200,000 for 30 years. The start rate is 5 percent and the borrower…

A: a) Computation:

Q: A floating rate mortgage loan is made for $12 for a 30-year period at an initial rate of 12 percent…

A: To calculate the loan balance at the end of year 1 for a floating rate mortgage loan, we can use the…

Q: A basic ARM is made for $217,000 at an initial interest rate of 6 percent for 30 years with an…

A: A loan agreement is a legal document that outlines the terms and conditions of a loan between a…

Q: A partially amortizing mortgage is made for $62,000 for a term of 10 years. The borrower and lender…

A: Principal Loan Amount (P) is $62,000Interest Rate (annual) is 7%Term (n) is 10 yearsNumber of…

Q: Suppose a borrower makes a $100,000 loan with annual payments at a 10 percent rate and a 10-year…

A: Annuity: An annuity is the series of payments which is received or paid for a fixed period of…

Q: A basic ARM is made for $203,000 at an initial interest rate of 6 percent for 30 years with an…

A: A loan is a financial agreement in which a party, often a financial institution or lender, lends a…

Q: Required: a. If the borrower makes interest-only payments for three years, what will the payments…

A: Amortization: It is the process of paying the loan by making periodic and regular payments. These…

Q: A partially amortizing loan for $100,000 for 10 years is made at 9 percent interest. The lender and…

A: A loan is a financial arrangement in which a borrower receives a sum of money from a lender with the…

Q: A mortgage for $100,000 is made with initial payments of $500 per month for the first year. The…

A: Given: The mortgage is $100,000 The initial payment is $500 The rate of interest is 9%

Q: A partially amortizing mortgage is made for $50,000 for a term of 10 years. The borrower and lender…

A: Here, Mortgage Amount is $50,000 Duration of Loan is 10 years Balloon payment is $20,000 Interest…

Q: A basic ARM is made for $200,000 at an initial interest rate of 6 percent for 30 years with an…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Prepare an amortization schedule for a three-year loan of $111,000. The interest rate is 10 percent…

A: A loan amortization table is a schedule of payback of a loan in equal installments planned at a…

Q: A partially amortizing mortgage is made for $75,000 for a term of 10 years. The borrower and lender…

A: Monthly Payment = P * r * [(1+ r)n/({1 + r}n -1) Where, P = Principal borrowed =75,000 r = periodic…

Q: An interest-only ARM is made for $218,000 for 30 years. The start rate is 5 percent and the borrower…

A: It is the process of paying the loan by making periodic and regular payments. These payments include…

Q: A basic ARM is made for $203,000 at an initial interest rate of 6 percent for 30 years with an…

A: A loan is a financial agreement in which a party, often a financial institution or lender, lends a…

Q: A floating rate mortgage loan is made for $195,000 for a 30-year period at an initial rate of 12…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: A fully amortizing mortgage loan is made for $84,000 at 6 percent interest for 25 years. Payments…

A: A mortgage is a covered loan that is borrowed to purchase a property. The property in question acts…

Q: A fully amortizing CAM loan is made for $132,000 at 6 percent interest for 20 years. Required: a.…

A: Loan:A loan is an amount of money given by one party typically a financial institution to another…

Q: You plan to borrow $25,000 at a 3.4% annual interest rate compounded annually. The terms require you…

A: In case of amortization loan, equal payments at equal interval over the loan period are made. A…

Q: A floating rate mortgage loan is made for $180,000 for a 30-year period at an initial rate of 12…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: A floating rate mortgage loan is made for $100,000 for a 30-year period at an initial rate of 12…

A: Loan balance at the end of year 1 can be calculated using FV (rate, nper, pmt, [Pv], [type]) Rate…

Q: A floating rate mortgage loan is made for $185,000 for a 30-year period at an initial rate of 12…

A: The concept of the time value of money acknowledges that the value of money today differs from its…

Q: A floating rate mortgage loan is made for $170,000 for a 30-year period at an initial rate of 12…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: A floating rate mortgage loan is made for $120,000 for a 30-year period at an initial rate of 12…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: A partially amortizing loan for $92,000 for 10 years is made at 6 percent interest. The lender and…

A: Present value= $92000 Future Value = $20000 Rate = 6% Term = 10 years Compounding period = 12

Q: A floating rate mortgage loan is made for $190,000 for a 30-year period at an initial rate of 12…

A: Step 1:a. Step 2:b. Final answer: a. The loan balance at the end of year 1 is approximately…

Q: A basic ARM is made for $180,000 at an initial interest rate of 6 percent for 30 years with an…

A: Mortgage is long-term loan contract which is used to buy fixed asset generally home. Mortgage is…

Q: basic ARM is made for $220,000 at an initial interest rate of 6 percent for 30 years with an annual…

A: A loan agreement is a legal document that outlines the terms and conditions of a loan between a…

Q: Prepare an amortization schedule for a five-year loan of $20,000 in its entirety. The interest rate…

A: The amortization schedule for a loan being repaid by a level annual payment, is required.

Q: A fully amortizing mortgage loan in the amount of $100,000 is made at 12 percent interest for 20…

A: In this scenario, you are giving up 3 points to reduce your closing costs. 1 point is 1% of the loan…

Q: basic ARM is made for $216,000 at an initial interest rate of 6 percent for 30 years with an annual…

A: A loan agreement is a legal document that outlines the terms and conditions of a loan between a…

Question

A borrower and lender agree on a negative-amortizing loan in the amount of $300,000 at
4% interest for 30 years. The amount due at maturity will be $350,000. Calculate the loan
balance after 20 years.
$324,694.82
O $350,000.00
O $326,422.53
O $141,461.68

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Details Available

VIEW

Step 2 Loan Balance after 20 year

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?
A borrower and lender agree on a negative-amortizing loan in the amount of $300,000 at 4% interest for 30 years. The amount due at maturity will be $350,000. Calculate the loan balance after 20 years. $324,694.82 O $350,000.00 $326,422.53 1.461.68
In an amortization table for a four-year loan of $45,280, given an interest rate of 11%, how much will the principal payment be in the second year if the loan calls for equal payments? Select one: a.$15222.90 O b.$10,448.32 O c.$15,593 d.$10,671.69
Finance
1
You have taken out a $7,500,000 loan with a 4% interest rate, 30 year amortization and ten year term. What is the loan balance after the final loan payment? a. $0 b. $7,390,303 c. Cannot determine with information provided d. $5,908,797
A partially amortizing loan for $92,000 for 10 years is made at 6 percent interest. The lender and borrower agree that payments will be monthly and that a balance of $20,000 will remain and be repaid at the end of year 10. Required: a. Assuming 4 points are charged by the lender, what will be the yield if the loan is repaid at the end of year 10? b. What must the loan balance be if it is repaid after year 4? c. What will be the yield to the lender if the loan is repaid at the end of year 4? Note: For all requirements, do not round intermediate calculations, round your final answers to 2 decimal places.
Assume a $620,000 loan over a 20 year period at a fixed rate of 5.85%. How much would a borrower save by taking the loan out on a full-capital repayment schedule rather than an Interest Rate basis? a. $164,328.81 b. $327,813.04 c. $0 d. $292,186.96
Prepare an amortization schedule for a four-year loan of $165,280. The interest rate is 4% per year, and the loan calls for equal annual payments. How much interest is paid in the second year? Select one: a.$5,217 b.$1,751 c.$4,051 d.$5,054
question on the pic
Prepare an amortization schedule for a three-year loan of $60,000. The interest rate is 6 percent per year, and the loan calls for equal annual payments. How much is the principal payment for the first year? Select one: a.$ 50,377.17 b.$ 22,446.59 c.$ 20,000 d.$ 18,846.59
A $50,000 mortgage loan requires monthly payments of $520 for 20 years. What is the semiannually compounded nominal rate of interest on the loan?A. 11.3752%B. 11.6987%C. 11.1146%D. 0.9381%E. 11.2573%