Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that bot have the same closing costs. You need a $160,000 loan. Option 1: a 30-year loan at an APR of 9%. Option 2: a 15-year loan at an APR of 8.5%. ... Find the monthly payment for each option. The monthly payment for option 1 is $ The monthly payment for option 2 is $ (Do not round until the final answer. Then round to the nearest cent as needed.) Find the total amount paid for each option. The total payment for option 1 is $ The total payment for option 2 is $ (Use the answers from the previous step to find this answer. Round to the nearest cent as needed.) Compare the two options. Which appears to be the better option? OA. Option 1 is the better option, but only if the borrower plans to stay in the same home for the entire term of the loan. OB. Option 1 will always be the better option.

Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that bot have the same closing costs. You need a $160,000 loan. Option 1: a 30-year loan at an APR of 9%. Option 2: a 15-year loan at an APR of 8.5%. ... Find the monthly payment for each option. The monthly payment for option 1 is $ The monthly payment for option 2 is $ (Do not round until the final answer. Then round to the nearest cent as needed.) Find the total amount paid for each option. The total payment for option 1 is $ The total payment for option 2 is $ (Use the answers from the previous step to find this answer. Round to the nearest cent as needed.) Compare the two options. Which appears to be the better option? OA. Option 1 is the better option, but only if the borrower plans to stay in the same home for the entire term of the loan. OB. Option 1 will always be the better option.

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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fixed rate and have the same closing costs. You need a $140,000 loan. Option 1: a 30-year loan at an APR of 7.5%. Option 2: a 15-year loan at an APR of 7%. Find the monthly payment for each option. The monthly payment for option 1 is $ The monthly payment for option 2 is $ (Do not round until the final answer. Then round to the nearest cent as needed.) Find the total amount paid for each option. The total payment for option 1 is $ The total payment for option 2 is $ (Use the answers from the previous step to find this answer. Round to the nearest cent as needed.) Compare the two options. Which appears to be the better option? OA. Option 2 will always be the better option OB. Option 1 is the better option, but only if the borrower plans to stay in the same home for the entire term of the loan. OC. Option 1 will always be the better option. D. Option 2 is the better option, but only if the borrower can afford the higher monthly payments over the entire term of the loan.
Consider the following options for a $153,000 mortgage. Calculate the monthly payment and total closing costs for each option. Which option would Clearly explain why you chose the option that you chose. you choose? Option 1: a 30-year fixed-rate loan at 4.3% with $1500 closing cost and no points • Option 2: a 30-year fixed-rate loan at 3.8% with $1200 closing cost and 2 points
You are trying to purchase a condo and are looking at various options to finance the purchase.Your two best options are Option I a loan at 13.25 % (APR) interest compounded semi-annually. Or a 11.75 % (APR) interest loan compunded daily. Evaluate each loan structure and determine the Effecte Annual Rate (EAR) of each loan to determine what is the better deal.
Give typing answer with explanation and conclusion Assume you want to borrow $300,000 and have been presented with two options. The first option is a fully amortizing loan with an interest rate of 3% and $4000 of origination fees and points. The second option is an interest only loan with an interest rate of 4% and $5000 of origination fees and points. Both loans are for 30 years and have monthly payments. Further assume that if the borrower chooses the interest only loan, any money saved on the monthly payment can be invested with a projected return of 7%. Also assume that the proceeds from the investment will first be used to pay off any remaining balance on the loan. How much money will the investor have left at the end of 30 years after repaying the loan? Group of answer choices None, the investor will owe $12,373.42 $323,060.72 $22,063.08 $30,750.78
to determine the regular payment amount, rounded to the nearest dollar. The price of a small cabin is $55,000. The bank requires a 5% down payment. The buyer is ffered two mortgage options: 20-year fixed at 7% or 30-year fixed at 7%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 20-year option? se PMT= Find the monthly payment for the 20-year option, (Round to the nearest dollar as needed.)
Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $80,000 loan. Option 1: a 30-year loan at an APR of 8.15%. Option 2: a 15-year loan at an APR of 7.75%. Question content area bottom Part 1 Find the monthly payment for each option. The monthly payment for option 1 is $ enter your response here. The monthly payment for option 2 is $ enter your response here.
Assume you need a $87,000.00 loan for a home. Compute the monthly payment for each option. Assume that the loans are fixed rate and that closing costs are the same in both cases. Round to the nearest penny.Option 1: a 30 year-loan at an APR of 7.25%The monthly payment for Option 1 would be $.Option 2: a 15 year-loan at an APR of 6.5%The monthly payment for Option 2 would be $
You are offered the following two choices. You can either receive Option I: 3 annual payments of $100 each to be received exactly 1, 2, and 3 years from now; Or, Option II: one payment of $269 to be received exactly one year from now. The annual interest rate (as an EAR) that would make you indifferent between receiving the above two options is _______%.
The price of a home is $150,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 6.5% or 30-year fixed at 6.5%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15-year option? Use the following formula to determine the regular payment amount. PMT= -nt [-(+9)] Find the monthly payment for the 15-year option. $ (Round to the nearest dollar as needed.) CIT
The price of a home is $180,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 10% or 30-year fixed at 10%. Calculate the amount of interest paid for pach option. How much does the buyer save in interest with the 15-year option? Use the following formula to determine the regular payment amount. PMT = intosh HD Find the monthly payment for the 15-year option. (Round to the nearest dollar as needed.) Find the monthly payment for the 30-year option. (Round to the nearest dollar as needed.) O Time Remaining: 01:15:52 Next 10 MacBook Air esc FS . FA F7 $ 4 % & 2 3 5 6 7 8 9 Q W E T Y %3D A S K C V
Problem: You are interested in a fixed-rate mortgage for $399,000 and need to choose the between options: a 15-year mortgage or a 30- year mortgage. The current mortgage rate is 3.75% for the 15-year mortgage, and 3.25% 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.
Borrower Joe has an existing loan that requires 15 more years of monthly payments of $1,040. He is considering refinancing the loan balance of $117.095.08 with a new loan at the current market rate of 5.675% for 15-year loans. Both the old loan and the new loan require 2 points plus $500 in origination fees. What is the NPV of the refinancing decision at an opportunity rate of 5.675%?

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