Fatimah pays monthly rent of $520 for her townhouse. If she bought the property, the mortgage loan, property tax, and utilities would cost her $920 per month. Using the current mortgage loan rate of 6.6% compounded semi-annually, calculate how much money Fatima could accumulate over 10 years if she continues to rent and invests the $400 per month difference.

Fatimah pays monthly rent of $520 for her townhouse. If she bought the property, the mortgage loan, property tax, and utilities would cost her $920 per month. Using the current mortgage loan rate of 6.6% compounded semi-annually, calculate how much money Fatima could accumulate over 10 years if she continues to rent and invests the $400 per month difference.

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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Mystia Green is considering the purchase of a house, which will cost her $450,000. She will borrow the entire purchase price and make monthly payments over the next twenty years. The first payment is due next month, and the interest rate is 6.50% per annum (p.a.), compounded monthly She will owe $_________on the house immediately following the 121 st payment.
Julio buys a koi fishpond (and fish to put in it for his wife on their anniversary. He pays $8000 for the pond and fish with $2000 down. The dealer charges add-on interest of 3.5% per year, and Julio agrees to pay the loan with 36 equal monthly payments. Use this information to answer the following questions: 1) Find the total amount of interest he will pay. 2) Find the monthly payment. 3) Find the APR value (to the nearest half percent). 4) Find (a) the unearned interest and (b) the payoff amount if he repays the loan in full with 12 months remaining. Use the most accurate method available.
When Gustavo and Serrana bought their home, they had a 5.9% loan with monthly payments of $870.60 for 30 years. After making 78 monthly payments, they plan to refinance for an amount that includes an additional $35,000 to remodel their kitchen. They can refinance at 4.2% compounded monthly for 25 years with refinancing costs of $625 included with the amount refinanced. How long will it take to pay off this new loan if they pay $1200 each month?
Evan and Emmanuel want to buy a $250,000 home. They plan to pay 15% as a down payment, and take out a 30 year loan at 4.9% interest for the balance. a) How much is the loan going to be? b) What will the monthly payment be for Evan and Emmanuel? c) How much of the first payment is interest? d) What is the total of the payments? e) How much interest was paid?
Jenny and Leo plan to purchase a new house and the couple is able to obtain a 25-year 3.6% (per annum, compounded monthly) amortised loan but they must put down 20% deposit. The loan requires end-of-month repayments of $2,500 where the first payment is due a month after the loan is taken. Assuming that the couple has enough savings for the down payment, what is the cost of the house that they want to purchase? a. 494,068.50 b. 2,470,342.49 c. 750,000 Od. 617,585.62
Patti and Jaime bought a house for $187,600. They put 20% down and obtains a simple interest amortized loan for the rest at 6 3/8 % interest for thirty years. a) Find their monthly payment.b) Find the total interest paid. c) Prepare an amortization schedule for the first two months of the loan
Jose and Rosa are looking for a condo. Their combined gross annual income is $61,000. The best mortgage rate offered by their bank is a 3.12 percent, five-year fixed rate compounded semi-annually with a 20-year amortization. The annual property taxes are estimated at $1,360, and the annual heating costs are $1,340. Their personal debt consumption is $500 per month. Condo fees are estimated at $700 per month. The bank's guideline for TDS is 30 percent. Based on this information, what is the maximum monthly mortgage payment they could afford? The maximum monthly mortgage payment they could afford is $ (Round to the nearest cent.)
Anthony planned to buy a house but could afford to pay only $9,000 at the end of every 6 months for a mortgage with an interest rate of 5.70% compounded semi-annually for 25 years. She paid $30,000 as a down payment. a. What was the maximum amount she could afford to pay for a house? b. What was her total amount spent for the house through the mortgage period including the down payment (not taking the time-value of money into account)? c. What was the total amount of interest paid through the mortgage period?
Jenna bought a new car for $⁢28,000. She paid a 20% down payment and financed the remaining balance for 36 months with an APR of 3.5%. Assuming she makes monthly payments, determine the total interest Jenna pays over the life of the loan. Round your answer to the nearest cent, if necessary.
Patty purchases a $240,000 house. She pays $40,000 down and takes out a 25 year mortgage with monthly payments, at an interest rate of 12% interest compounded monthly. How much money will Patty have to pay each month?
Amy financed the purchase of her living room suite over two years. Her monthly payments are $231.02 and she is charged an interest rate of 19.6% compounded semiannually. What was the purchase price of Amy’s furniture? ____________ b. How much is the cost of financing? _____________
When Christian bought his home, he borrowed $315,700 at 4.2% interest, compounded monthly for 25 years. If he makes all 300 payments, repaying his loan on schedule, how much interest will he pay? (Assume all payments are of equal amount)

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