I have been considering refinancing my house. To do so, I will need to borrow $300,000. The loan period is 30 years and payments are made monthly. Several months ago I could have gotten a loan at 3% APR, but today the APR is 4%. How much additional interest will I pay over the life of the loan because of the interest rate increase?

I have been considering refinancing my house. To do so, I will need to borrow $300,000. The loan period is 30 years and payments are made monthly. Several months ago I could have gotten a loan at 3% APR, but today the APR is 4%. How much additional interest will I pay over the life of the loan because of the interest rate increase?

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

On June 1, you borrowed $350,000 to buy a house. The mortgage interest rate is 3.5%. The loan is to be repaid in equal monthly payments over 30 years. What is your monthly payment ? How much equity will you have in the house after 5 years? How much interest have you paid during year 6 only? How much interest will you be paying over the whole course of the loan?
You want to borrow $30,000. For the loan to you must repay $1100 every quarter (4 times per year) for the next 8 years plus $8000 at the end of the 8 years. Based on this, what rate of interest are you paying?
A borrower made a constant payment mortgage loan 8 years ago for $400,000 at 12 percent interest for 30 years. 1. What is the monthly payment? 2. What is the current loan balance? 3. Assume this is homeowner has been offered a chance for refinance for the amount at the current balance for 22 years at 10.5% interest rate. What is the monthly payment if the homeowner chooses to refinance? 4. If the origination fees and closing costs are $25,500, and the costs are not financed by the lender. What is the effective cost of refinancing? Should this homeowner refinance? 5. If this homeowner plans to sell the house in 5 years, should this homeowner refinance (show your answer with the effective annual rate)? use excel to get the answers and show the formulas
Suppose you want to save up for a down payment on a house in 5 years. You plan to save $1,000 per month in a savings account. The savings account offers an annual interest rate of 6%. a) If the payments are made at the end of each month, how much money will you have at the end of 5 years? b) If the payments are made at the beginning of each month, how much money will you have at the end of 5 years?
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 8% APR (monthly). You are considering making an extra payment of $150 today (that is, you will pay an extra $150 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of return (expressed as an APR with monthly compounding) have you earned on the $150?
You decide to replace your income of $70,000 a year in retirement for 30 years. How much do you need in your retirement account the day you retire to make that happen, assuming a real interest rate of 3%?
(Annuity payments) To buy a new house, you must borrow $145, 000. To do this, you take out a $145, 000, 20-year, 9 percent mortgage. Your mortgage payments, which are made at the end of each year (one payment each year), include both principal and 9 percent interest on the declining balance. How large will your annual payments be?
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 $
Your car loan has monthly payments of $295 for the next 5 years with the first payment due today. If the annual interest rate is 5.16%, what is the value of the payments today?
You have just taken out a mortgage of $50,000 for 30 years, with monthly payments at 6% interest. The same day you close on the mortgage you receive a $25,000 gift from your parents to be applied to the mortgage principal. What amount of time will now be required to pay off the mortgage if you continue to make the original monthly payments? What is the amount of the last payment? (Assume any residual partial payment amount is added to the last payment.)
You need a 20-year, fixed-rate mortgage to buy a new home for $230,000. Your mortgage bank will lend you the money at a 6.6 percent APR for this 240-month loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $950? Multiple Choice O O $88,924.29 $103.581.46 $386,349.21 $374,758.73 O $401,803.18

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