Jim has an annual income of $300,000. Jim is looking to buy a house that has monthly property taxes of $1,200 and monthly homeowner's insurance of $300. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 25% and a maximum back end DTI limit of 35%. Jim will make the biggest mortgage payment he can that satisfies both the front end DTI limit and the back end DTI limit. Jim will get a fully amortizing 30 year FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. What is the biggest mortgage loan Jim can get? O A. $1,071,071.25 O B. $139,705.05 OC. $1,973,025.99 OD.$1,409,304.28

Jim has an annual income of $300,000. Jim is looking to buy a house that has monthly property taxes of $1,200 and monthly homeowner's insurance of $300. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 25% and a maximum back end DTI limit of 35%. Jim will make the biggest mortgage payment he can that satisfies both the front end DTI limit and the back end DTI limit. Jim will get a fully amortizing 30 year FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. What is the biggest mortgage loan Jim can get? O A. $1,071,071.25 O B. $139,705.05 OC. $1,973,025.99 OD.$1,409,304.28

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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Sam can afford to spend $500 per month on a car. He figures he needs half of it for gas, parking, and insurance. He has been to the bank, and they will loan him 100% of the car’s purchase price. (Note: If he had a down payment saved, then he could borrow at a lower rate.) (a) If his loan is at a nominal 12% annual rate over 36 months, what is the most expensive car he can purchase? (b) The car he likes costs $14,000 and the dealer will finance it over 60 months at 12%. Can he afford it? If not, for how many months will he need to save his $500 per month? (c) What is the highest interest rate he can pay over 60 months and stay within his budget if he buys the $14,000 car now?
Bill needs a new car and can afford monthly car payments of $400. The interest rate on new car loans is 7% APR and payments are made at month end. Bill wonders whether to arrange a 48 or 60 month loan. With either loan Bill will borrow the maximum amount and buy the most expensive car possible. The average annual rate of depreciation of a car's value is 18%. Bill can invest his spare cash in a mutual fund expected to pay 5%, Compounded monthly. Bill will keep whichever car he buys for 5 years. a.) What is the maximum he can spend on a car if he arranges a 48 month loan? What if he arranges a 60 month loan? b.) Compare Bill's wealth (the value of his car plus his investments) after 5 years if he arranges a 48 month loan to his wealth if he arranges a 60 month loan.
Jamie is going to buy some furniture with a single payment loan that is discounted. The loan will be for $5,000 for two years at 10% interest. Calculate the APR on this loan. (Show all work.)
Jamie is going to buy furniture with a single-payment loan that is discounted. The loan will be for $5,000 for 2 years at 10% interest. Calculate the annual percentage rate (APR) on this loan. (Show all work.)
Seth and Alexandra Moore of Elk Grove Village, Illinois have an annual income of $120,000 and want to buy a home. Currently, mortgage rates are 4.0 percent. The Moores want to take out a mortgage for 30 years. Real estate taxes are estimated to be $5,160 per year for homes similar to what they would like to buy, and homeowner's insurance would be about $1,620 per year. Using a 28 percent front-end ratio, what are the total annual and monthly expenditures for which they would qualify? Round your answers to the nearest dollar. Total annual expenditures $ Monthly expenditures $ Using a 36 percent back-end ratio, what monthly mortgage payment (including taxes and insurance) could they afford given that they have an automobile loan payment of $450, a student loan payment of $350, and credit card payments of $270? (Hint: Subtract these amounts from the total monthly affordable payments for their income to determine the amount left over to spend on a mortgage.) Round your…
Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
"Jim has an annual income of $240,000. Jim is looking to buy a house with monthly property taxes of $1000 and monthly homeowner s insurance of $200. Jim has $1,500 in monthly student loan payments and an average monthly credit card bill of $1,000. Apple bank has a maximum front end DTI limit of 28% and a maximum back end DTI limit of 36%. Considering both the front end DTI limit and the back end DTI limit, what is the most they will allow Jim to spend on a monthly mortgage payment?"
Mateo and Klaus have now saved up their down payment to buy a home, but they still need to borrow to cover the rest. For the home they want this will require a mortgage of $585,000 to cover the remaining amount and they're not sure whether they could afford the monthly loan payments. The bank has offered them a mortgage interest rate of 5.15%, compounded semi-annually. How much would they have to be able to afford to pay each month in order to pay off their mortgage in 25 years? [Blank-1]What is the total amount of interest that would be paid to the lender after 25 years of payments? [Blank-2]What if Mateo and Klaus could only afford a monthly payment of $2,500? What would be the maximum mortgage amount they could afford to borrow from the bank, if all the other conditions were the same? [Blank-1]What is the total amount of interest that would be paid to the lender over 25 years? [Blank-2]
Mary has found a beautiful home on Richmond Rd. that she loves.The price of the home is $285,000. If Mary and George qualify for a30-year loan at a fixed interest rate of 3.99%, can they afford thehome? (Hint: Don't forget about the down payment!)
Tom and Kyra Courtney are considering buying a house and are researching the potential costs. Their adjusted gross income is $144,000. The monthly mortgage payment for the house they want would be $1,450. The annual property taxes would be $9,400, and the homeowner’s insurance premium would cost them $876 per year. What is the front end ratio and will they be able to qualify?

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