Bha Frank and Carole have to decide between a 5% mortgage and a 4.25% mortgage with 1 pre-paid point. The loan value is $175,000 and both are conventional 30-yearfixed rate mortgages. What is the payback period for the lower priced mortgage?O 18 months22 months48 months36 months

Mortgage are paid by equal monthly installments and these monthly installments carry payment for…

Frank and Carole have to decide between a 5% mortgage and a 4.25% mortgage with 1 pre-paid point. The loan value is $175,000 and fixed rate mortgages. What is the payback period for the lower priced mortgage? 18 months 22 months 48 months

Frank and Carole have to decide between a 5% mortgage and a 4.25% mortgage with 1 pre-paid point. The loan value is $175,000 and fixed rate mortgages. What is the payback period for the lower priced mortgage? 18 months 22 months 48 months

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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Concept explainers

Loans

A loan is a term that we are all familiar with. The processing of loans is one of the most important functions of a bank. It keeps our economy stable and facilitates the implementation of monetary policies. Let's take a look at the different forms of loans and get some answers to some common questions.

Question

Bha

Frank and Carole have to decide between a 5% mortgage and a 4.25% mortgage with 1 pre-paid point. The loan value is $175,000 and both are conventional 30-year
fixed rate mortgages. What is the payback period for the lower priced mortgage?
O 18 months
22 months
48 months
36 months

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