A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The loan will be $200,000 at 6 percent interest for 20 years.a. How would you analyze these alternatives?b. What if the biweekly loan was available for 5.75 percent? How would your answer change?

Q: Consider a mortgage loan where the periodic payment is 1 and the per period mortgage interest is 5%.…

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Q: l Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose a…

A: Loans are paid by equal monthly payments and these monthly payments carry the payment for interest…

Q: You have decided to buy a house. You can get a mortgage rate of 5.15 percent, and you want your…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose…

A: Amount of Loan = $ 200,000 Interest Rate(r1) =4.5% for 15 years Interest Rate(r2) = 5% for 30 years…

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A: A written agreement through which a lender gets the right to take the property that is put as a…

Q: Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose…

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Q: TOTAL INTEREST PAID. You are considering purchasing a home that requires $450,000 mortgage at 5.25%.…

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Q: A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The…

A: Mortgages are loan which are amortized over the period of the loan.It can be repaid in monthly or…

Q: A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The…

A: The rate of return, often abbreviated as ROR or RoR, is a measure used to evaluate the profitability…

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A: EMI or monthly mortgage payments are the fixed amount paid by the borrower to the lender that…

Q: maximum loan

A: Loan amount refers to the amounts which a person borrowed at any given time under the mortgage. It…

Q: You can afford a $1400 per month mortgage payment. You've found a 30 year loan at 7.9% interest.…

A: Present value of annuity.PV = A*wherePV = Present value of annuityA = periodic paymentsr = interest…

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A: Loan Amortization: It is the process of paying the loan amount by the borrower in periodic payments…

Q: A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The…

A: Periodic payment refers to an amount that is paid by the borrower to the lender including the…

Q: Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose…

A: Loan amount = $200,000 15-year mortgage monthly payment = $1529.99 or $1530 (round to nearest…

Q: Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose…

A: Given,

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A: Formulas that are used:-

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Q: Suppose your gross monthly income is $5,300 and your current monthly payments are $575. If the bank…

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Q: Suppose you want to purchase a home for $525,000 with a 30-year mortgage at 4.84% interest. Suppose…

A: Price of Home = $525000 Inetest Rate(r) = 4.84%/12 = 0.4033% Downpayment = 30% Amount financed…

Q: You can afford monthly payments of $700. If current mortgage rates are 2.85% for a 15-year fixed…

A: Monthly payment (C) = $700Monthly interest rate (r) = 0.002375 (i.e. 0.0285 / 12)Number of monthly…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.