Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $74,000. Assuming that she puts 20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? (Use the Table 15.1) Note: Do not round intermediate calculations. Round your answers to the nearest cent. a. 25 Years, 4.75% b. 25 Years, 5.25% c. 25 Years, 5.50% d. 25 Years, 5.75% Monthly payment Total cost of interest
Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $74,000. Assuming that she puts 20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? (Use the Table 15.1) Note: Do not round intermediate calculations. Round your answers to the nearest cent. a. 25 Years, 4.75% b. 25 Years, 5.25% c. 25 Years, 5.50% d. 25 Years, 5.75% Monthly payment Total cost of interest
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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Question
Transcribed Image Text:Amortization table (mortgage principal and interest per $1,000)
Interest
Only
0.16667
0.17708
0.18750
0.19792
0.20833
0.21875
0.22917
0.23958
0.25000
0.26042
0.27083
0.28125
0.29167
0.30208
0.31250
0.32292
0.33333
0.34375
0.35417
0.36458
0.37500
0.38542
0.39583
0.40625
0.41667
0.42708
0.43750
0.44792
0.45833
0.46875
0.47917
0.48958
0.50000
0.51042
0.52083
0.53125
0.54167
0.55208
0.56250
Rate
2.000
2.125
2.250
2.375
2.500
2.625
2.750
2.875
3.000
3.125
3.250
3.375
3.500
3.625
3.750
3.875
4.000
4.125
4.250
4.375
4.500
4.625
4.750
4.875
5.000
5.125
5.250
5.375
5.500
5.625
5.750
5.875
6.000
6.125
6.250
6.375
6.500
6.625
6.750
10 Year
9.20135
9.25743
9.31374
9.37026
9.42699
9.48394
9.54110
9.59848
9.65607
9.71388
9.77190
9.83014
9.88859
9.94725
10.00612
10.06521
10.12451
10.18403
10.24375
10.30369
10.36384
10.42420
10.48477
10.54556
10.60655
10.66776
10.72917
10.79079
10.85263
10.91467
10.97692
11.03938
11.10205
11.16493
11.22801
11.29130
11.35480
11.41850
11.48241
15 Year
6.43509
6.49281
6.55085
6.60921
6.66789
6.72689
6.78622
6.84586
6.90582
6.96609
7.02669
7.08760
7.14883
7.21037
7.27222
7.33440
7.39688
7.45968
7.52278
7.58620
7.64993
7.71397
7.77832
7.84297
7.90794
7.97320
8.03878
8.10465
8.17083
8.23732
8.30410
8.37118
8.43857
8.50625
8.57423
8.64250
8.71107
8.77994
8.84909
20 Year
5.05883
5.11825
5.17808
5.23834
5.29903
5.36014
5.42166
5.48361
5.54598
5.60876
5.67196
5.73557
5.79960
5.86404
5.92888
5.99414
6.05980
6.12587
6.19234
6.25922
6.32649
6.39417
6.46224
6.53070
6.59956
6.66881
6.73844
6.80847
6.87887
6.94966
7.02084
7.09238
7.16431
7.23661
7.30928
7.38232
7.45573
7.52950
7.60364
25 Year
4.23854
4.29966
4.36131
4.42348
4.48617
4.54938
4.61311
4.67735
4.74211
4.80738
4.87316
4.93945
5.00624
5.07352
5.14131
5.20959
5.27837
5.34763
5.41738
5.48761
5.55832
5.62951
5.70117
5.77330
5.84590
5.91896
5.99248
6.06645
6.14087
6.21575
6.29106
6.36682
6.44301
6.51964
6.59669
6.67417
6.75207
6.83039
6.90912
30 Year
3.69619
3.75902
3.82246
3.88653
3.95121
4.01651
4.08241
4.14892
4.21604
4.28375
4.35206
4.42096
4.49045
4.56051
4.63116
4.70237
4.77415
4.84650
4.91940
4.99285
5.06685
5.14140
5.21647
5.29208
5.36822
5.44487
5.52204
5.59971
5.67789
5.75656
5.83573
5.91538
5.99551
6.07611
6.15717
6.23870
6.32068
6.40311
6.48598
40 Year
3.02826
3.09444
3.16142
3.22921
3.29778
3.36714
3.43728
3.50818
3.57984
3.65226
3.72541
3.79930
3.87391
3.94923
4.02526
4.10198
4.17938
4.25746
4.33620
4.41559
4.49563
4.57629
4.65758
4.73947
4.82197
4.90505
4.98870
5.07293
5.15770
5.24302
5.32888
5.41525
5.50214
5.58952
5.67740
5.76575
5.85457
5.94385
6.03357
Transcribed Image Text:Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $74,000. Assuming that she puts
20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? (Use
the Table 15.1)
Note: Do not round intermediate calculations. Round your answers to the nearest cent.
a. 25 Years, 4.75%
b. 25 Years, 5.25%
c. 25 Years, 5.50%
d. 25 Years, 5.75%
e. What is the savings in interest cost between 4.75% and 5.75%?
Note: Round your answer to the nearest dollar amount.
Interest cost
Monthly payment Total cost of interest
f. If Harriet uses 30 years instead of 25 for both 4.75% and 5.75%, what is the difference in interest?
Note: Use 360 days a year. Round your answer to the nearest dollar amount.
Interest difference
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