Bronn took out a fully amortizing, 5/1 hybrid, adjustable rate mortgage of $ 159026.13 with 18-year maturity. The interest rate is indexed to SOFR and the margin is 3%. At the time of the loan origination, SOFR was 1%. The lender, however, offers a teaser rate of 2% during the first 5 years. Note that the accrual rate is still based on the SOFR and the 3% margin. Bronn's monthly payment during the 4th per month. year equals $

Bronn took out a fully amortizing, 5/1 hybrid, adjustable rate mortgage of $ 159026.13 with 18-year maturity. The interest rate is indexed to SOFR and the margin is 3%. At the time of the loan origination, SOFR was 1%. The lender, however, offers a teaser rate of 2% during the first 5 years. Note that the accrual rate is still based on the SOFR and the 3% margin. Bronn's monthly payment during the 4th per month. year equals $

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

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A lender offers a 1-year loan at what he calls 8 percent interest but requires the interest to be paid at the beginning rather than at the end of the year , as the usual practlce is to what interest ratc computed in the conventional manner does this interest charge correspond?
Consider the following. Two mortgages are available for $500,000.00. Both are paid monthly, compounded quarterly have terms of 5 years and are amortized over 25 years. One has an interest rate of 3% however prohibits any prepayment, the other has an interest rate of 3.1% and allows for prepayment of 10% of the balance per year. If the borrower expects to make a lump sum payment at the end of each year of $400.00 which mortgage costs the least interest by the end of the term?
Of the bank approves a mortgage of 240,000 for 30 years and at a rate of 6% what will the the annnual mortgage payment
The payment necessary to amortize a 4.9% loan of $86,000 compounded annually, with 4 annual payments is $24,196.70. The total of the payments is $96,786.80 with a total interest payment of $10,786.80. The borrower made larger payments of $25,000.00. Calculate (a) the time needed to pay off the loan, (b) the total amount of the payments, and (c) the amount of interest saved. a. The time needed to pay off the loan with payments of $25,000.00 is _____ years. (Round up to the nearest year.) b. The total amount of the payments is $______ (Round to the nearest cent as needed.) c. The amount of interest saved is $______. (Round to the nearest cent as needed.)
Which of the following statements regarding a 20-year (240-month) $225,000, fixed-rate mortgage is CORRECT? (Ignore taxes and transactions costs.) The outstanding balance declines at a slower rate in the later years of the loan's life. The remaining balance after three years will be $225,000 less one third of the interest paid during the first three years. Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant. Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant. The proportion of the monthly payment that goes towards repayment of principal will be lower 10 years from now than it will be the first year.
A mortgage lender has offered you a $325,000 15-year 3/1 Hybrid adjustable rate mortgage (ARM) loan with monthly payments that fully amortizes with $4,000 of origination fees. The initial rate of the offered loan is 3.6%, but future payments after the loan resets will be indexed the current 10-year T-bond rate plus a margin of 276 basis points. There are no interest-rate caps on the loan and the 10-year T-bond rate will be equal to 3.24% at the time the loan will be originated. What is the anticipated size in dollars of the 44th payment rounded to the nearest cent?
Assume that 3 years ago you arranged a fixed rate mortgage of $ 5 0 0 , 0 0 0 with CIBC at � 2 = 6 % ( 2 mears. compounded semi - annually ) amortized over 2 5 years with monthly payments and a 5 - year term. The currently prevailing fixed rates have been much lower than before. This makes you consider refinancing the mortgage. You are wondering how much penalty to pay: ( a ) three - month interests ( b ) interest rate differential. Suppose currently CIBC has posted the following fixed rates ( think about which one to use here ) . \ table [ [ Length of Term, � 2
A borrower has the option of accepting a fixed rate loan for five years at 10% or a floating rate loan of LIBOR plus 3%. Assume the current LIBOR rate is 6%. If the floating rate loan was chosen, did the borrower make the right decision if the LIBOR rates at the beginning of the next four years are 6.5%, 7.0%, 7.5%, and 7.75%? Note that the LIBOR rate at the beginning of the year is used to determine the payment at the end of the year.
A mortgage for $200,000 with interest rate of 7.20%, fixed monthly payments, and term of 30 years was originated 10 years ago. If the loan's current balance is refinanced for the rest of the original term of at the rate of 6.30% with monthly payments, what is the implied annual savings rate given that the existing loan has a refinancing fee of 4% of the remaining balance at the time of refinancing and that loan is expected to be outstanding for 9 years? Selected Answer: Below 6% O A. Correct Answer: Е. Between 12% and 14%
The payment necessary to amortize a 4.5% loan of $81,000 compounded annually, with 5 annual payments is $18,451.12. The total of the payments is $92,255.60 with a total interest payment of $11,255.60. The borrower made larger payments of $19,000.00. Calculate (a) the time needed to pay off the loan, (b) the total amount of the payments, and (c) the amount of interest saved. Thank you~
A borrower is interested in comparing the monthly payments on four otherwise equivalent 30 year FRMs. All of the loans are for $300,000 and have a 5.0% interest rate. Rank the loans in size order of their monthly payments from smallest to largest: 1) Fully amortizing ($0 balance remaining at the end of the loan term) 2) Interest-Only ($300,000 balance remaining at the end of the loan term) 3) Partial Amortization ($200,000 balance remaining at the end of the loan term) 4) Negative Amortization ($400,000 balance remaining at the end of the loan term) a) 1, 2, 3, 4 b) 4, 3, 2, 1 c) 4, 2, 3, 1 d) 1, 3, 2, 4
Barrett Greenhouses obtained a $647,000 mortgage amortized over 20 years at 6% compounded semiannually for a 5-year term. The mortgage is now at the end of the initial 5-year term, and will be renewed at 7.5% compounded semiannually for the next 5-year term. How much will the monthly mortgage payments increase upon renewal as a result of the higher interest rate if the original amortization period is retained?

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