Exercise 2: You are buying a foreclosed house. Your income only allows you to make a payment of $800 per month. You can negotiate the price of the house or the annual percent rate (APR). Proceed as follows. a. Based on the information in columns B and C, use Goal Seek to find the price that drives the monthly payment to $800. b. Based on the information in columns E and F, use Goal Seek to find the APR that drives the monthly payment to $800. Adjust price Price APR Months of payments Monthly Payment Adjust APR House Cost $130,000.00 7.00% APR Months of Payments Monthly Payment 360 360 $0.00 $361.11 Target Payment $800.00 Target Payment $800.00
Exercise 2: You are buying a foreclosed house. Your income only allows you to make a payment of $800 per month. You can negotiate the price of the house or the annual percent rate (APR). Proceed as follows. a. Based on the information in columns B and C, use Goal Seek to find the price that drives the monthly payment to $800. b. Based on the information in columns E and F, use Goal Seek to find the APR that drives the monthly payment to $800. Adjust price Price APR Months of payments Monthly Payment Adjust APR House Cost $130,000.00 7.00% APR Months of Payments Monthly Payment 360 360 $0.00 $361.11 Target Payment $800.00 Target Payment $800.00
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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
Transcribed Image Text:Exercise 2: You are buying a foreclosed house. Your income only allows you to make a payment of $800 per month. You can negotiate the price of the
house or the annual percent rate (APR). Proceed as follows.
a. Based on the information in columns B and C, use Goal Seek to find the price that drives the monthly payment to $800.
b. Based on the information in columns E and F, use Goal Seek to find the APR that drives the monthly payment to $800.
Adjust price
Price
APR
Months of payments
Monthly Payment
Adjust APR
House Cost
APR
Months of Payments
Monthly Payment
$130,000.00
7.00%
360
360
$0.00
$361.11
Target Payment
$800.00
Target Payment
$800.00
14
5
16
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