Assume a $100,000 mortgage loan with 30-year term. The lender is charging an annual inte rate of 10% and two discount points at origination. Up-front financing costs paid to third par total $1,000. Assuming the mortgage is held for five years and no prepayment, the lender's yield is percent. (round to two decimal places)

Assume a $100,000 mortgage loan with 30-year term. The lender is charging an annual inte rate of 10% and two discount points at origination. Up-front financing costs paid to third par total $1,000. Assuming the mortgage is held for five years and no prepayment, the lender's yield is percent. (round to two decimal places)

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

A fully amortizing mortgage loan is made for $100,000 for 15 years. The interest rate is 6 percent per year compounding monthly. Payments are to be made monthly. What is the loan outstanding after one monthly payment? (Round to a dollar) $89,692 $89,380 $99,656 $89,691 $79,725
Assuming a 28% lender's affordability ratio, estimated monthly property taxes and insurance of P250, a 25% down payment (of the purchase price), and an annual gross income of P84,800, calculate the maximum purchase price based on monthly income. The monthly payment will occur at the end of the month and you plan to pay off the mortgage over a 30-year period at a 6.25% annual interest rate. a.P374,343b.P280,757c.P282,219d.P321,360e.None of the above
A fully amortizing mortgage loan is made for $109,000 at 6 percent interest for 20 years. Required: a. Calculate the monthly payment for a CPM loan. b. What will the total of payments be for the entire 20-year period? Of this total, how much will be the interest? c. Assume the loan is repaid at the end of eight years. What will be the outstanding balance? How much total interest will have been collected by then? d. The borrower now chooses to reduce the loan balance by $5,900 at the end of year 8. 1. What will be the new loan maturity assuming that loan payments are not reduced? 2. Assume the loan maturity will not be reduced. What will the new payments be? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Calculate the monthly payment for a CPM loan. Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. Monthly payment
An interest-only mortgage is made for $94,000 at 6 percent interest for 10 years. The lender and borrower agree that monthly payments will be constant and will require no loan amortization. Required: a. What will the monthly payments be? b. What will be the loan balance after five years? c. If the loan is repaid after five years, what will be the yield to the lender? d. Instead of being repaid after five years, what will be the yield if the loan is repaid after 10 years?
Ironwood Bank is offering a 30-year mortgage with an APR of 6.10% based on monthly compounding. If you plan to borrow $161,000, what will be your monthly payment? (Note. Be careful not to round any intermediate steps less than six decimal places.) The loan payment is § (Round to the nearest cent.)
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?
A fully amortizing mortgage loan in the amount of $100,000 is made at 12 percent interest for 20 years. Payments are to be monthly. If 3 points are deducted in closing costs, what is the effective interest rate for the loan?
suppose a 25- year mortgage of $400,000 at a fixed nominal interest rate of 3.5% per year, compounded annually. 1. what is the yearly payment? 2. what are the interest paid and the principal repayment in the first year?
For a bank loan assuming a one-year repayment period and 14% interest, the monthly payment is S (Round to the nearest cent.) For a bank loan assuming a one-year repayment period and 14% interest, the total cost is $ (Round to the nearest cent For the add-on loan method with one year repayment period and 12% interest, the monthly payment is S (Round to the nearest cent.) For the add-on loan method with one-year repayment period and 12% interest, the total cost is S (Round to the nearest cent If Shirley pays the bank loan back after six months, she will save"S (Round to the nearest cent) If Shirley pays the add-on loan back after six months, she will receive a rebate
Assume that a lender offers a 30-year, $145,000 adjustable rate mortgage (ARM) with the following terms: Initial interest rate = 7.5 percent Index = one-year Treasuries Payments reset each year Margin = 2 percent Interest rate cap = 1 percent annually; 3 percent lifetime Discount points = 2 percent Based on estimated forward rates, the index to which the ARM is tied is forecasted as follows: Beginning of year (BOY) 2 = 7 percent; (BOY) 3 = 8.5 percent; (BOY) 4 = 9.5 percent; (BOY) 5 = 11 percent. Required: a. Compute the payments and loan balances for the ARM for the five-year period. b. Compute the yield for the ARM for the five-year period.

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