James settled into new job, financial security, decided to buy house, secure mortgage for $350,000 at 3.85% compounded semi annually. Mortgage contract requires monthly payments for 25 years Amortization Period. How much will the amortization period be shortened if James increase payments by 10% at the beginning of 4 year.

James settled into new job, financial security, decided to buy house, secure mortgage for $350,000 at 3.85% compounded semi annually. Mortgage contract requires monthly payments for 25 years Amortization Period. How much will the amortization period be shortened if James increase payments by 10% at the beginning of 4 year.

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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4. Tom takes out a loan for $15,000 at an APR of 6% to start out his business. He promises to make quarterly payments for 10 years, which will pay off the loan. What is his payment amount and how much interest will he pay over the total life of the loan?
Johnny and Lucy have purchased a home for $365,000. They will need to obtain a mortgage for 85% of that amount. The Near State Bank will give them a mortgage for 30 years at 9.5% interest. Their monthly payment will be $2500.50. Over the first 4 months, how much will go towards interest and how much will go towards principal?
Theodore D. Kat is applying to his credit union for a mortgage of $200,000. The bank has quoted 8% an interest rate. He would pay off the mortgage over 25- years (amortization period) and make a payment at the end of each month. A. Calculate EAR (1/100 of one percent, no %, e.g. 9.35) B. How much are Theodore's monthly payments?
Donelle just purchased a new home with a $400,000 mortgage with a fixed rate of 8.5% (APR) and a 30-year maturity. What are Donelle's monthly payments on the mortgage? O $3,101.69 O $2,833.33 O $2.907,85 $3,075.65
How much would Doug save in interest if he amortized his mortgage over 15 years, rather than 25 years, and assuming he makes monthly payments. The total mortgage amount is $440,000 and the interest rate is 5.4% compounded semi-annually.
Alan's monthly payments of $600 will pay off his mortgage loan in 7 years and 5 months. The interest rate on his mortgage is 6.6% compounded monthly. What is the current balance of the loan?
Jerome borrowed 5200 at 8 1/2% for six years compounded semi annually. What is the future value of the loan and how much interest will he pay on the loan
A couple borrows $300,000 at an APR of 4.8% compounded monthly on a 30-year mortgage with monthly payments of $1,574. (a) How much of the first payment goes to interest? (b) Find the total interest paid over the life of the loan. (c) After making their 70th payment, they refinance the loan at an APR of 3.6% compounded monthly for 15 years. The refinanced amount includes the unpaid balance from the original loan plus a refinance charge of $2,000. Find the new monthly payment. (d) Find the amount saved by refinancing.
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Todd Foley is applying for a $290,000 mortgage. He can get a $2,030 monthly payment for principal and interest and no points, or a $1,827 monthly payment with 4 points? How many months will it take Todd to cover the cost of the discount points if he takes the lower monthly payment?
three years ago , the Kennedys purchased a house and took out a mortgage of $ 1,000,000 from the HSBC bank. They amortized the mortgage over 25 years at 2.79\% compounded semi - annually for a 3 year term. The bank calculated their monthly payment should be $ 4,626. How much would the final payment be assuming the same interest rate over the 25 years ?
John Mayer Inc. purchases a house for $500,000. On January 1, He makes a 20 percent down-payment and gets a 30 year fixed mortgage with a 3.6 percent annual interest rate (i.e., he borrows 400,000). What are his monthly mortgage payments on the house if the first mortgage payment happens on January 31? Hint, this means interest compounds monthly.

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