not use ai please Assume you buy a house for $660,000 and have $132,000 as a down payment. Your mortgage rate is 3 percent APR compoundedsemi-annually and you amortize the mortgage over 25 years with monthly payments. You will assume that you could have earned 5percent EAR on the down payment (opportunity cost), your marginal income tax rate is 40 percent, real estate fees are 4 percent +HST,and property taxes will be $6,600 annually for this calculation. Ignore maintenance costs.a. What is the true return on your investment if you sell it in 6 years for $1,040,000? (Do not round your intermediate calculations.Round your answer to 2 decimal places. Omit the "%" sign in your response.)Return on Investment%b. What is an approximate annualized rate of return on your investment? (Do not round your intermediate calculations. Round youranswer to 3 decimal places. Omit the "%" sign in your response.)Annualized Rate of Return%

Part (a): True Return on Investment (ROI)Initial Costs: You made a down payment and incurred…

Answered: Assume you buy a house for $660,000 and…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

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You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
Assume you buy a house for $660,000 and have $132,000 as a down payment. Your mortgage rate is 3 percent APR compounded semi-annually and you amortize the mortgage over 25 years with monthly payments. You will assume that you could have earned 5 percent EAR on the down payment (opportunity cost), your marginal income tax rate is 40 percent, real estate fees are 4 percent +HST and property taxes will be $6,600 annually for this calculation. Ignore maintenance costs. a. What is the true return on your investment if you sell it in 6 years for $1,040,000? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.) Return on Investment % b. What is an approximate annualized rate of return on your investment? (Do not round your intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.) Annualized Rate of Return %
Let's say that you are planning to purchase a house. You have $32,000 set aside as a down payment towards teh purchase price of the house, and you are looking at a 20 year loan at 6.12% interest compounded monthly. Your financial planner has advised you that your mortgage payments for the year should not exceed 20% of your take-home pay. If your yearly take-home pay is $24,000, then find the maximum price of the house that you could purchase (while following the advice of your financial planner). Do not use TVM solver.
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