Alternatively, you can obtain from your bank a 30-year interest-only (IO) mortgagewith an introductory teaser interest rate of 3.6% (APR with monthly compounding).This complex mortgage will require you to only pay the introductory interest rate onthe loan for the first 5 years (i.e., first 60 monthly payments). Subsequently, themortgage will become a standard fully-amortizing mortgage for the remaining maturityof 25 years at an interest rate of 6% (APR with monthly compounding). Your mortgageloan amount will still be $750,000. Compute the required monthly payments for thefirst 5 years and the last 25 years.

For first 5 years Loan payment=750000 interest rate =3.6% monthly interest =3.6/12=0.3% monthly…

an for the first 5 years (i.e., first 60 monthly payments). Subseque age will become a standard fully-amortizing mortgage for the remaining rears at an interest rate of 6% (APR with monthly compounding). Your r mount will still be $750,000. Compute the required monthly payment years and the last 25 years.

an for the first 5 years (i.e., first 60 monthly payments). Subseque age will become a standard fully-amortizing mortgage for the remaining rears at an interest rate of 6% (APR with monthly compounding). Your r mount will still be $750,000. Compute the required monthly payment years and the last 25 years.

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

See similar textbooks

Similar questions

You take out a 30-year mortgage, at a nominal annual rate of X%, with monthly compounding. Each month, you make exactly the required payment. Consider the following table of data from the amortization schedule: Month N N + 1 Beginning Balance Payment $1,322.14 Interest Principal Ending Balance $217,120.83 $216,404.82 Based on this information, what is the nominal annual interest rate (with monthly compounding) for this mortgage? Enter your answer in X.XX format (2 decimal places). For example, if your answer is 6.25%, enter "6.25".
You are interested in a fixed-rate mortgage for $399,500 and need to choose the between options: a 15-year mortgage or a 30-year mortgage. The current mortgage rate is 6.5% for the 15-year mortgage, and 3.75% 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.
You want to get a commercial real estate mortgage of $6875599. You are offered a monthly payment loan with 5.75% interest and a 25 year amortization schedule with a balloon payment at the end of 7 years. What will be your monthly mortgage payment? State your answer as a number rounded to two decimal points
Suppose you are interested in taking an FHA mortgage loan for $250,000 in order to purchase your principal residence. In order to do so, you must pay an additional up-front mortgage insurance premium (UFMIP) of 1.0% of the mortgage balance. If the interest rate on the fully-amortizing mortgage loan is 5% and the term is 30 years and the UFMIP is financed (i.e., it is included in the loan amount), what is the dollar portion of your monthly mortgage payment that is designated to cover the UFMIP? A. $2,500.00B. $1,119.41C. $159.67D. $13.42
You take out a 30-year mortgage, at a nominal annual rate of X%, with monthly compounding. Each month, you make exactly the required payment. Consider the following table of data from the amortization schedule: Month N N + 1 O 3.15 %- 3.05% 3.35% O 3.45% Beginning Balance 3.25% Payment $1,289.21 Based on this information, what is the nominal annual interest rate (with monthly compounding) for this mortgage? Interest Principal Ending Balance $215.249.20 $214.525.02
Consider a typical situation for a 30-year, $100,000 mortgage. This option offers anannual mortgage interest rate of 7.25% and a loan origination fee of 1.5 points.1. Calculate the monthly payment for the loan. 2. If points are 1.5% of the loan amount, find the fee for points.3. Add the fee for points to the loan amount. This is the modified mortgage on whichthe APR is calculated.
You want to get a commercial real estate mortgage of $6055209. You are offered a monthly payment loan with 5.75% interest and a 25 year amortization schedule with a balloon payment at the end of 7 years. What will be your monthly mortgage payment? State your answer as a number rounded to two decimal points (e.g. if the answer is $2345.123, write 2345.12)
Consider a 30-year, fixed-rate mortgage for $100,000 at a nominal annual rate of 9%. If the borrower wants to pay off the remaining balance on the mortgage after making the 12th payment, what is the remaining balance on the mortgage?
Calculate the original loan size of a fixed-payment mortgage if the monthly payment is $1,146.78, the annual interest rate is 8.0%, and the original loan term is 15 years.
Consider a 30-year, fixed-rate mortgage for $100,000 at a nominal rate of 9%. a)If the borrower wants to pay off the remaining balance on the mortgage after making the 12th payment, what is the remaining balance on the mortgage? b) Compute the EAR of a 20-year, 6% fixed rate mortgage loan of $150,000 with 2 discount points andmonthly repayments.
Use an amortization table (Use Spreadsheet application such as Excel) that determines the monthly mortgage payment based on interest rate of 35% and a principal of GHS1000,000 with a 15-year maturity and then for a 30-year maturity. Is the monthly payment for the 15-year maturity twice the amount for the 30-year maturity or less than twice the amount? Explain.
A fully amortizing mortgage is made for $112,000 at 6.5 percent interest. Required: If the monthly payments are $1,060 per month, when will the loan be repaid? (Round up your answer to the nearest whole number)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS