I have to refinance $20,000,000. My current rate is 2.5% interest only with 6 months left of a 5 year term (I've spent 5OOK in interest for 4.5 years). I can renew at 5.5% today or 7.5% in 6 months from now. Which option is better? Refinance today at 5.5% or let my existing term continue @ 2.5% for another 6 months and then renew at 7.5%?

I have to refinance $20,000,000. My current rate is 2.5% interest only with 6 months left of a 5 year term (I've spent 5OOK in interest for 4.5 years). I can renew at 5.5% today or 7.5% in 6 months from now. Which option is better? Refinance today at 5.5% or let my existing term continue @ 2.5% for another 6 months and then renew at 7.5%?

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 have $4500 as a cash. You have 2 options to save money. To give your friend and she will pay back 20% with simple interest rate after 10 years or to put in ablank at 1% annual interest compounded daily for 10 years. Which option will you choose?
As we write this in January 2021, the 10-year interest rate is just 1.05%. How much would you have been prepared in January 2021 to pay for a strip that promises to pay $1,000 at the end of 10 years?
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%?
3) You are purchasing a car and have the option to pay $25,000 in cash (upfront) OR assume a lease with end of the month payments of $399 for five years. By purchasing, you will receive an estimated residual value (or scrap value) by selling the car for $2,500 at the end of the 5 years. If interest is 2.7% compounded annually, which financing option would you prefer? (16.1 DCF)
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.)
The NOI for the first year of your property is expected to be $100,000, and grow at 5% per year. You financed the property with a $500,000 mortgage at 8% and an amortization term of 20 years. If the selling costs are 5% and the outgoing cap rate is 10%, what is the before tax equity reversion if you sell at the end of year 5?
You are depositing $10,000 in a 5 year CD that pays 4.5% interest each year. How much interest will you accrue if you hold the CD until maturity? Show work. (Yes, this is compounding interest).
Cal Lury owes $10,000 now. A lender will carry the debt for five more years at 10 percent interest. That is, in this particular case, the amount owed will go up by 10 percent per year for five years. The lender then will require that Cal pay off the loan over the next 12 years at 11 percent interest. What will his annual payment be? Use Appendix A and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.

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