Jackson is looking to purchase a condo. He is looking to have a conventional mortgage as he does not want to pay for mortgage default insurance. The new condo units that he is interested in are on the market for $132,000. How long will it take Jackson to save for the 20% down payment, if interest is at 6.75% compounding monthly with monthly savings of $371? 48 months B 36 months C 24 months D 60 months E 72 months

Jackson is looking to purchase a condo. He is looking to have a conventional mortgage as he does not want to pay for mortgage default insurance. The new condo units that he is interested in are on the market for $132,000. How long will it take Jackson to save for the 20% down payment, if interest is at 6.75% compounding monthly with monthly savings of $371? 48 months B 36 months C 24 months D 60 months E 72 months

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

See similar textbooks

Similar questions

Andy Reid wants to buy a new home that costs $375,000. He can borrow money from the bank at an interest rate of 6.8% compounded monthly. The mortgage is for 30 years and requires monthly payments. What is Andy's monthly mortgage payment? Multiple Choice O $2,811.43 $2.44472 $1,041.67
Conor is comparing two potential housing options. Conor plans to stay in the home for 4 years, after which he plans to move again. Conor earns 12% annually on his other investments. He determines the following information about each option: OPTION 1: Purchase a home • Purchase a $270,000 home with a 30-year fixed mortgage • Loan amount = $270,000 (100% financing) • Annual mortgage interest rate = 6.00% Monthly mortgage payments = $1,618.79 • Additional monthly costs (insurance, taxes, maintenance) = $350.00 • Real estate growth rate = 5% annually .
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ 4257.64 × Can he pay off the loan and keep his payments under $4,300? Yes, under these conditions, Chuck will meet his goal. No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) □ □ □ □ □ make a lower down payment try to bargain for a lower sale price make a higher down payment try to negotiate a higher interest rate try to bargain for a higher sale price try to negotiate a lower interest rate
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. 1) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.95% loan if Chuck can pay 20% down. What will Chuck's new monthly payment (in $) be with these conditions? (Round your answer to the nearest cent.) $ With these conditions, will Chuck be able to pay off the loan and meet his goals? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. 2) Attempting to reduce his monthly payment further, Chuck continues to negotiate with the seller. If the seller agrees to reduce the listed price by $4,800, finance the deal with a 6.95% loan, and if Chuck pays the 20% down, what will Chuck's monthly payment be (in $)?…
Please Do both questions Edie wants to borrow $325,000 to purchase a new condominium in New York. What are her monthly payments for a fully amortizing 30-year fixed rate mortgage with a 4.5% contract rate? Ans:___ what are her monthly payments for a partially amortizing 25-year fixed rate mortgage with a 4.5% contract rate and 5-year maturity? Ans:___
Tobin is buying a new apartment. He can afford a mortgage payment of $1990 a month, and a down payment of $11000. He obtained a 16-year loan at 6.05% compounded monthly. Use Excel to determine what the most expensive apartment he can buy under these terms. How much will Tobin pay in interest over the 16-year years? Apartment price = $ Interest paid = $
You are borrowing $250,000 to buy a house, using a standard, 30-year mortgage. Your mortgage lender offers a 5.50% mortgage with no points, or a 5.20% mortgage with X points. You plan on living in the house for exactly 84 months, paying only the required payment each month, and without refinancing your mortgage. What points will make you indifferent between the two mortgages? Use the 5.50% rate to discount cash flows between the two options. Note: all rates in the problem are nominal annual rates with monthly compounding. Recall, 1 point is 1% of the mortgage. Carry your answer to 2 decimal places. For example, if your answer is 1.255 points, answer "1.26". a
A couple visits an open house and fall in love with the floor plan and location. They tell the host they would love to buy the house but do not know if they can afford it. In the conversation, the broker learns that they are currently paying $1750 per month for rent. Would the principal and interest payments be within the amount of their current rent if the price is $249,000 with interest rates for a zero down, 30 years mortgage at 5% interest? Note: 30 years of 5% interest is $5.37. A. Only if they have a 20% down payment. B. No, the payment is more than their current rent amount C. There is not enough information to determine an answer D. Yes, the payment is within the range of their current rent amount.
You have two goals for which you want to save both relating to a home purchase. You have decided to start a savings plan. First, you want to purchase your new $500,000 home in eight years. Your first goal is to have $100.000 saved for a down payment and you will finance the rest with a 30-year, 6% APR conventional simple amortized mortgage. Secondly, you also want to pay off the home 15 years after purchase, but you do not want to be committed to a higher 15-year mortgage payment. So, separate from making your monthly payment, your second goal is you want to save enough money to make a final, lump-sum payment, sent as payment nunber 181, to pay off the balance remaining at that time. You want to invest on a monthly basis beginning one month from now and ending when you pay off the mortgage, as one continuous annuity. Assume you can earn 8% EAR on your investment. Calculate the monthly savings contribution required to meet your two goals.
Bill plans to buy a new house soon he’s considering two mortgage options. 15 year mortgage with a APR 2.75% or a 30 year mortgage with an APR of 3.14%. Both options are compound interest monthly. Bill currently spends $1,685 each month on rent he will like to spend the same on a mortgage. He doesn’t have a down payment and will finance the full price for the home. Round answer to whole numbers a. If Bill choose the 15 year mortgage how much doesn’t he need to borrow b. If Bill choose the 30 year mortgage how much doesn’t he need to borrow c. Which option will allow Bill go borrow the most. By how much d. Which option will Bill spend the most overall. By how much
You want to buy a house that costs $280,000. You have $28,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $252,000. However, the realtor persuades the seller to take a $252,000 mortgage (called a seller take-back mortgage) at a rate of 6%, provided the loan is paid off in full in 3 years. You expect to inherit $280,000 in 3 years, but right now all you have is $28,000, and you can afford to make payments of no more than $19,000 per year given your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.) a. If the loan was amortized over 3 years, how large would each annual payment be? Do not round intermediate calculations. Round your answer to the nearest cent. $ Could you afford those payments? -Select- b. If the loan was amortized over 30 years, what would each payment be? Do not round intermediate calculations. Round your answer to the nearest cent. $ Could you afford those…
If you buy a home with less than 20% down, you will pay an additional monthly fee, PMI (private mortgage insurance), until you reach 20% equity. Keep track of when you reach 20% equity so you can request to have your PMI removed. Ken Buckmiller’s home recently appraised at $307,000. His mortgage was for $292,000 at 5% for 30 years with PMI of $299.17 per month. What is his monthly payment plus PMI? His mortgage balance is currently $184,200. Has he reached 20% equity? (Use Table 15.1.) Note: Round your intermediate calculations and final answer to the nearest cent. The answer is NOT $1,866.63 Monthly payment:????

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS