EX5-3 (Algo) The Munsters have been saving...The Munsters have been saving money in order to buy a house. They figure that, given current interest rates, they could afford a$435,000 home. Before looking at houses on the market they decide to explore the possibility of building a new home. The Munstersfigure they could buy a suitable lot for $87,500-$$92,500. At a minimum they want to build a 2,300-square-foot house. The cost for ahouse of the quality they desire is $174 per square foot. Given this information, should the Munsters pursue the option of building anew house?Answer is complete but not entirely correct.Estimated lowest total cost of building S 480,600

Data given:Cost of ready home=$435,000Cost of Lot (Lowest )=$87,500Area of house=2300 sq.ftCost of…

Answered: EX5-3 (Algo) The Munsters have been…

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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The buyer of a piece of real estate is often given the option of buying down the loan. This option gives the buyer a choice of loan terms in which various combinations of interest rates and discount points are offered. The choice of how many points and what rate is optimal is often a matter of how long the buyer intends to keep the property. Darrell Frye is planning to buy an office building at a cost of $982,000. He must pay 10% down and has a choice of financing terms. He can select from a 9% 30-year loan and pay 4 discount points, a 9.25% 30-year loan and pay 3 discount points, or a 9.5% 30-year loan and pay 2 discount points. Darrell expects to hold the building for three years and then sell it. Except for the three rate and discount point combinations, all other costs of purchasing and selling are fixed and identical. (Round your answers to the nearest cent. Use this table, if necessary.)
Please solve using formula or TVM
3. A village has six residents, each of whom has accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 15% per year. Or they can buy a llama, send it onto the commons to graze and then sell it after one year. The price the villager gets for selling the llama depends on quality of fleece it grows. The quality of fleece depends on how many llamas are grazing. At the end of the year the villager will have $115 if they buy the bond or $109-$122 if they buy the llama depending on how many llamas are purchased Number of Llamas 1 2 3 4 5 6 Price per Llama 122 118 116 114 112 109 a. If each villager decides individually how to invest, how many llamas will be sent onto the commons and what will be the net village income? b. What is the socially optimal number of llamas for this village? c. The village committee votes to auction the right to graze the llamas to the highest bidder. How much will the grazing right sell for? What will be the net…
Hi I have a question regarding Austrlian Retirement and Financial Planning. In this example, the couple are retired and one of them is ill and looking for a retirement home, the home is going to cost $450,000 deposit. Neither of the couple work and draw 50,000 from their super in order to stay afloat. They have 20,000 and 562,000 in super combined, have a 900,000 dollar home. They also have 10,000 worth of home contents, a 15,000 dollar vehicle, and 55,000 cash in the bank. It is important to note they have 0 debt and everything is fully paid off. Neither of them have ever received pension money or government support. Myrtle wishes to put bob in an aged care facility, and when that is done she wants to return to work part time. 1. How will Myrtle's income be funded of $40,000 per annum be financed now, in the future and when she retires in 10 years time?
your dad wants to purchase a new house and lot in zamboanga city, so he decide to apply for housing loan from landBank using his existing house and lot collateral. the bank conducted an appraisal of his existing house an lot and came up with 2,000,000 appraised value. Your dad will pay the developer 20% down payment. The fair market value of the new house and lot is 1,500,000. What is the loan collateral ratio?
H2.
2. Suppose you bought a condo for $200,000 financing it with a $40,000 down payment of your own funds and a $160,000 mortgage loan from a bank. D.you only put down $20,000 and borrowed $230,000 to buy the $250,000 house. Assuming that the market value of your house has fallen to $210,000 and ignoring interest and other costs, calculate your rate of return on your asset (ROA) and your rate of return on equity (ROE).
EX5-3 (Algo) The Munsters have been saving... The Munsters have been saving money in order to buy a house. They figure that, given current interest rates, they could afford a $405,000 home. Before looking at houses on the market they decide to explore the possibility of building a new home. The Munsters figure they could buy a suitable lot for $72,500-$$77,500. At a minimum they want to build a 2,300-square-foot house. The cost for a house of the quality they desire is $162 per square foot. Given this information, should the Munsters pursue the option of building a new house? X Answer is complete but not entirely correct. $ Estimated lowest total cost of building The Munsters should not consider 444,000 X Answer is complete and correct. building a new house under the current conditions. RE
TOPIC: Buying a HOME 21) HOME PRICE OFFER. Your friend is ready to make an offer on a 2300 sq. ft. home that is priced at $435,000. She investigates other homes on Lots of similar sizes, within the same neighborhood. A 2,200 square foot home that sold for $450,000. A 2450 square foot home that sold for $495,000. A 3000 square foot house that sold for $550,000. What is the approximate market value of the house she is interest in? Is it undervalued or overvalued?
James is working with several mortgage brokers to secure a loan to purchase a new house. He plans on living in the house for many years to come and wants a loan that will have minimal risk. What type of loan should James get? A. An adjustable-rate mortgage. His loan payments will adjust over the life of the loan. B. A negative amortizing loan. This will allow James to pay off the loan more quickly. C.A fixed-rate loan. His loan payments will remain constant, which will allow him to properly budget for the payments. D.A term loan. This will allow James to have smaller monthly payments with a balloon payment at the
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EX5-3 (Algo) The Munsters have been saving... The Munsters have been saving money in order to buy a house. They figure that, given current interest rates, they could afford a $425,000 home. Before looking at houses on the market they decide to explore the possibility of building a new home. The Munsters figure they could buy a suitable lot for $82,500-$$87,500. At a minimum they want to build a 2,300-square-foot house. The cost for a house of the quality they desire is $170 per square foot. Given this information, should the Munsters pursue the option of building a new house? Estimated lowest total cost of building The Munsters should not consider building a new house under the current conditions.

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