None In 2021, a standard 30-year fixed mortgage in the US could be had for somewhere around3%. Following a series of interest rate increases by the Federal Reserve, that number is nowabove 7%. Suppose in 2021 you were interested in buying a house worth $500,000 bytaking out a 30-year mortgage at 3% rate and 20% down payment. How much higher willyour monthly mortgage payments be now for the same house at a 7% rate (same house priceand percent down payment). Answer in whole dollars.

Given:House Price: $500,000Downpayment: 20% = 500000*.20= $100,000Loan amount (P)= House…

Answered: In 2021, a standard 30-year fixed…

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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In 2021, a standard 30-year fixed mortgage in the US could be had for somewhere around 3%. Following a series of interest rate increases by the Federal Reserve, that number is now above 7%. Suppose in 2021 you were interested in buying a house worth $607,000 by taking out a 30-year mortgage at 3% rate and 20% down payment. How much higher will your monthly mortgage payments be now for the same house at a 7% rate (same house price and percent down payment). Answer in whole dollars.
If you could pay for your mortgage forever, how much would you have to pay per month for a $1,000,000 mortgage, at a 6.5% annual interest rate? Work out the answer (a) if the 6.5% is a bank APR quote and (b) if the 6.5% is a true effective annual rate of return.
Suppose you take out a $117,000, 20-year mortgage loan to buy a condo. The interest rate on the loan is 5%. To keep things simple, we will assume you make payments on the loan annually at the end of each year. a. What is your annual payment on the loan? b. Construct a mortgage amortization. c. What fraction of your initial loan payment is interest? d. What fraction of your initial loan payment is amortization? e. What is the total of the loan amount paid off after 10 years (halfway through the life of the loan)? f. If the inflation rate is 3%, what is the real value of the first (year-end) payment? g. If the inflation rate is 3%, what is the real value of the last (year-end) payment? h. Now assume the inflation rate is 6% and the real interest rate on the loan is unchanged. What must be the new nominal interest rate? i-1. Recompute the amortization table. i-2. What is the real value of the first (year-end) payment in this high-inflation scenario? j. What is the real value of the last…
Suppose you take out a 50-year $250,000 mortgage with an APR of 6%. You make payments for 3 years (36 monthly payments) and then consider refinancing the original loan. The new loan would have a term of 20 years, have an APR of 5.8%, and be in the amount of the unpaid balance on the original loan. (The amount you borrow on the new loan would be used to pay off the balance on the original loan.) The administrative cost of taking out the second loan would be $1900. What are the monthly payments on the original loans ?(Round nearest to cent)
Please complete parts A through E. Attached is an example.
Suppose you take out a 25-year $300,000 mortgage with an APR of 6%. You make payments for 5 years (60 monthly payments) and then consider refinancing the original loan. The new loan would have a term of 15 years, have an APR of 5.6%, and be in the amount of the unpaid balance on the original loan. (The amount you borrow on the new loan would be used to pay off the balance on the original loan) The administrative cost of taking out the second loan would be $1500. Use the information to complete parts (a) through (e) below a. What are the monthly payments on the original loan? (Round to the nearest cent as needed) b. A short calculation shows that the unpaid balance on the original loan after 5 years is $269,796.26, which would become the amount of the second loan. What would the monthly payments be on the second loan? $(Round to the nearest cent as needed.) c. What would be the total amount you would pay if you continued with the original 25-year loan without retrancing? (Round to the…
Please solve all parts. Attached is an example.
You need a loan of 250000 to buy your first home. The bank offers a 30 year fixed-rate mortgage with an APR of 4.16% or a 15 year fixed-rate mortgage with an APR of 3.22%.What will your monthly payments be for the 30-year mortgage? How much will the total interest be for the 30-year mortgage? What will your monthly payments be for the 15-year mortgage? How much will the total interest be for the 15-year mortgage?
Suppose you want to buy a $1M house and saved for a 20% downpayment (so you only need to borrow 80% of the price). You are willing to take a 30-year fixed rate mortgage at a monthly interest rate of R = 0.6%. What is the monthly mortgage payment required? C = $____ (answer the closest integer, e.g., 1234, without $ sign)
Suppose that you take out a 40-year $175000 mortgage with an APR of 6%. You make payments for 3 years and then you consider refinancing the original loan. The new loan would have a term of 15 years, have and APR of 5.7% and be in the amount of the unpaid balance on the original loan. The administrative cost of taking out the second loan would be $1700. What are the monthly payments on the original loan? What would the monthly payment of the second loan be? What would the total amount you would pay if you continued with the original 40-year loan without refinancing? What would the total amount would you pay with the refinancing?
Suppose you take out a 30-year mortgage for $ 275000 at 8.5% interest. The monthly payments on this loan are $ 2114.51. If you pay an extra 40% per month on your mortgage, how soon will you pay off the loan?New length in years = How much will you save in interest by making the extra payments?Saving =
Suppose you take a 30-year fixed-rate mortgage loan for $600,000 with a mortgage rate of 6%. How much do you still owe on the loan after 15 years?

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