Five years ago, you acquired a 30-year loan of $130,450, charging 6.5% annual interest, compounded monthly, and requiring monthly payments. At this time, interest rates on 15-year loans have dropped to 2.3% APR, compounded monthly, and you wish to refinance what you still owe with a new loan at this new rate. (a) How much (in dollars) will you be refinancing? Round your answer to the nearest dollar. (b) How much (in dollars) will your new monthly payment be after refinancing? Round your answer to the nearest cent.

Five years ago, you acquired a 30-year loan of $130,450, charging 6.5% annual interest, compounded monthly, and requiring monthly payments. At this time, interest rates on 15-year loans have dropped to 2.3% APR, compounded monthly, and you wish to refinance what you still owe with a new loan at this new rate. (a) How much (in dollars) will you be refinancing? Round your answer to the nearest dollar. (b) How much (in dollars) will your new monthly payment be after refinancing? Round your answer to the nearest cent.

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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Similar questions

You borrow $305,000; the annual loan payments are $46,451.56 for 30 years. What interest rate are you being charged? Round your answer to the nearest whole number. = %
With the following information, compute the net benefit of refinancing: Current loan balance: $200,000 Remaining term: 15 years Interest rate: 6.5% Old loan monthly payment: $1742.22 Expected number of future payments you will make: 72 Interest rate available on a new loan: 4.5% Cost of refinancing:5% of the outstanding balance. what is the resulting net benefit?
Ten years ago you took out $200,000, 30-year mortgage with an annual interest rate of 9 percent and monthly payments of $1,609.25. But since you took out that loan, interest rates have dropped. i. Determine the outstanding balance on your current loan for the remaining 240 payments. ii. If you refinance your loan at an annual rate of 7 percent, calculate the new monthly payment for another 20 years.
This morning, you borrowed $14,700 at an APR of 8.9 percent. If you repay the loan in one lump sum three years from today, how much will you have to repay? $15,514.47 $18,984.58 O $19,022.33 $15,324.60 O None of these answers are correct
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%?
What size loan must we take today with a 14% compound interest rate to have end-of-year payments of $1400, $1320, $1240, $1160, and $1080 for the next five years, respectively? In other words, if you take out a loan today, and after making all five payments, above, the loan is paid off, what is the value of that loan? Answer:
A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives. The first is a 90% loan for 25 years at 9% interest and the second is a 95% loan for 25 years at 9.25% interest. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money? 18.75% OO 14.34% 13.50% 12.01%
You are buying a house for $290,000.00 with a downpayment of $29,000.00. The loan will be paid back over 20 years with monthly payments of $1,609.25. If the interest rate is 4.2% compounded monthly, what would the unpaid balance be immediately after the eleventh payment? What is the equity after the eleventh payment? The unpaid balance would be $ The equity would be $
You are buying a house for $200,000.00 with a downpayment of $40,000.00. The loan will be paid back over 15 years with monthly payments of $1,307.33. If the interest rate is 5.5% compounded monthly, what would the unpaid balance be immediately after the twenty-ninth payment? What is the equity after the twenty-ninth payment? The unpaid balance would be $ (Round to 2 decimal places.) The equity would be $ (Round to 2 decimal places.)
You borrow $165,000; the annual loan payments are $9,541.97 for 30 years. What interest rate are you being charged? Round your answer to the nearest whole number
When purchasing a $100,000 house, a borrower is comparing two loan alternatives. The first loan is an 80% loan at 4% with monthly payments of $591.75 for 15 years. The second loan is 90% loan at 5% with monthly payments of $526.13 over 25 years. What is the incremental cost of borrowing the extra money assuming the loan will be held for the full term? O 6.50% O 13.21% O 7.20% O 13.70%
You want to borrow $300000 to start a business. The loan initial balance is increased by 2% of the loans face value(for loan originations fees, mortgage insurance,credit check,title searches etc) Your annual payments are calculated using an initial balance of $306000, an interest rate of 9% and a 20 year term. The bank requires you to refinance the loan in 5 years by paying it off with a balloon payment. what interest rate are you paying?

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