How much money will the bank loan you? How much can you offer for the house?

Q: You have just taken out a 30-year mortgage on your new home for $120,000. This mortgage is to be…

A: Use financial calculator:The present value of mortgage = 120,000The future value when all the loan…

Q: You want to buy a house valued at $200,000.  AFter a down payment, you can finance the house with a…

A: The annual percentage rate is the rate earned on the investment or paid on loan over the period of…

Q: You are ready to buy a house and you have $75,000 for a down payment and closing costs. Closing…

A: Here, Amount for Down Payment and Closing Cost is $75,000 Closing Cost id 4.5% of Loan Value Annual…

Q: You are purchasing a house and you are considering getting a fixed-rate mortgage (FRM) for $750,000.…

A: Required monthly payments for the mortgage is calculated using excel PMT function Required monthly…

Q: Oppenheimer Bank is offering a 30-year mortgage with an APR of 5.18% based on monthly compounding…

A: Discounting is a technique to compute the present value (PV) of future amounts. Mortgage is a type…

Q: You take out a 30-year mortgage (360 months) with a face value of $200,000 and a stated annual rate…

A: When you take out a mortgage you have to make periodic constant payments towards that mortgage.…

Q: You purchase a home for $434,000 by making a down payment of 15% and financing the remaining amount…

A: First we need to use loan amortgage formula below to calculate monthly payment.  where P=Loann…

Q: ou have secured a loan from your bank for two years to build your home. The terms of the loan are…

A: Working Note #1 Calculation of loan amount after 2 year period: Loan amount after 2 year period=…

Q: You purchase a cottage for $175,000. You obtain a 25-year, fixed-rate mortgage loan at 12.5% after…

A: A mortgage is a loan arrangement that allows a borrower to purchase a house or other real estate…

Q: You are buying a house and will borrow $280,000 on a 30-year fixed rate mortgage with monthly…

A: Amount Borrowed $     2,80,000.00Tenure, years30APR4.15%If buy downInterest rate3.75%

Q: Big Dom's Pawn Shop charges an interest rate of 20 percent per month on loans to its customers. Like…

A: When we take a loan from banks they charge us interest on that loan. Similarly when we borrow money…

Q: You want to take out a $179,000 mortgage (home loan). The interest rate on the loan is 4.1 %, and…

A: After making payments for 15 years, you will still owe approximately $116,143 on your mortgage.…

Q: are buying a house and will borrow $197,000 on a 25-year fixed rate mortgage with monthly payments…

A: Mortgage loans are paid by monthly payments and these monthly payment carry the payment for interest…

Q: You need a 15-year, fixed - rate mortgage to buy a new home for $230,000. Your mortgage bank will…

A: A balloon payment is a significant, lump-sum amount due at the conclusion of a loan term, following…

Q: You are considering buying a house. The home is currently listed for $750,000. Terms for the loan…

A: To calculate the monthly mortgage payment, use the formula for a fixed-rate mortgage:Where:M =…

Q: You buy a house for $250,000 and pay $50,000 down.  The loan is for 25 years at 6% monthly. What is…

A: Interest: it is a finance cost that charged on borrowed value for specific period.

Q: You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend…

A: The lum sump that has to be paid at the end of the mortgage period for settling the loan at given…

Q: You are a loan officer trying to structure a 5/25 ARM mortgage. The interest rate in the first 5…

A: A mortgage refers to a loan used for the purchase of real estate. The loan is covered by the real…

Q: You expect to graduate with $30,847 in student loans. The interest rate on your loan is 6.4 percent…

A:

Q: What is the annual percentage rate ( APR) of the loan?

A: The annual percentage rate is an annual interest rate used to represent the cost of borrowing. It…

Q: You receive a 10-year subsidized student loan of $29,000 at an annual interest rate of 4.8%. What…

A: Loan payments are given by, L = E(1-(1+r)^-n)/r Where, E = payment = ?? r = interest rate = 4.8%/12…

Q: You have just taken out a $23,000 car loan with a 7% APR, compounded monthly. The loan is for five…

A: We buy expensive things and large ticket items like a house or a car etc. by taking loans from…

Q: You are considering buying a house.  The home is currentlylisted for $750,000.  Terms for the loan…

A: The following is the excel formula used for the calculation:

Q: Midwest Bank is offering a 25-year mortgage with an APR of 6% based on monthly compounding. With…

A: A mortgage may be a sort of credit utilized to buy genuine bequest, ordinarily a domestic. It…

Q: You took out a 30 year mortgage of $300,000 for your new apartment. The APR for your loan is 3.5%.…

A: Mortgage period = 30 years Mortgage amount = $300,000 Interest rate = 3.5%

Q: Oppenneimer Bank is offering a 30-year mortgage with an APR of 4.86% based on monthly compounding.…

A: Here we will use the concept of time value of money and the concept of compounding. Money earns…

Q: You purchase a home for $438,000 by making a down payment of 15% and financing the remaining amount…

A: Monthly payment refers to the amount that is being paid every month either in the beginning or end…

Q: Suppose you are getting a loan from a bank to purchase a feed business. The interest rate on the…

A: The objective of the question is to calculate the annual payment for a loan of $1,000,000 at an…

Q: You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year…

A: mortgage value = n = 30 x 12 = 360

Q: You are ready to buy a house and you have $35,000 for a down payment and closing costs. Closing…

A: Excel formula.

Q: You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year…

A: Mortgage period = 30 yearsPurchase price = $2,700,000Mortgage amount = 80% of purchase priceMonthly…

Q: You need a 30-year, fixed-rate mortgage to buy a new home for $210,000. Your mortgage bank will lend…

A: Present value of annuity is computed as follows:-PV= A*wherePV= Present value of annuityA= periodic…

Q: What is the effective annual rate of interest on the additional 10% of house value borrowed on the…

A: Effective Annual Rate of Interest: It refers to the effective rate of the annual stated rate and…

Q: You can afford to pay $15,000 at the end of each of the next 30 years to repay a home loan. If the…

A: Present value of annuity is the current worth of future annual cash flows over a period of time at a…

Q: Suppose you want to buy a house today that costs $139022. The bank requires you to make a 20% down…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: You are buying a house priced at $654,125. You plan to pay 20% of the price for down payment and…

A: A mortgage loan is a loan provided by a bank or lending institution to a borrower for the purpose of…

Q: need a 25-year, fixed-rate mortgage to buy a new home for $200,000. Your mortgage bank will lend you…

A: Balloon payment is a single large payment made at the end of the loan period to finish the loan on…

Q: You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend…

A: A balloon payment refers to a large lump sum payment that is due at the end of a loan term. Unlike a…

Q: You receive a 10-year subsidized student loan of $19,000 at an annual interest rate of 6.8%. What…

A: Using excel PMT function to calculate the monthly payment

Q: The price of a home is $260,000. The bank requires a 20% down payment and one point at the time of…

A: Explanation:Step 1: Calculate the down payment.The home price is $260,000, and the bank requires a…

Q: You need a 20-year, fixed-rate mortgage to buy a new home for $320,000. Your mortgage bank will lend…

A: The concept of time value of money will be applicable here. In case of time value of money when we…

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.