a. Create the amortization speadsheet for a $15,000,000 fixed-rate commerical mortgage loan. The loan has 30-year amortization with a 10-year balloon. The interest rate is 4% on an 30/360 basis. b. What is the difference between interest on an actual/360 basis vs. interest on a 30/360 basis? Which type of interest is more valuable?
a. Create the amortization speadsheet for a $15,000,000 fixed-rate commerical mortgage loan. The loan has 30-year amortization with a 10-year balloon. The interest rate is 4% on an 30/360 basis. b. What is the difference between interest on an actual/360 basis vs. interest on a 30/360 basis? Which type of interest is more valuable?
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
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Transcribed Image Text:a. Create the amortization speadsheet for a $15,000,000 fixed-rate commerical mortgage loan. The loan
has 30-year amortization with a 10-year balloon. The interest rate is 4% on an 30/360 basis.
b. What is the difference between interest on an actual/360 basis vs. interest on a 30/360 basis? Which type of interest is more valuable?
Expert Solution
Step 1
Balloon payment: It is the lump sum payment of the principal amount which is paid by the borrower usually at the end of the loan term.
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