LaMar and Louise Hubbs moved from Alabama to the heart of Texas. They were delighted to find a Southern-style needed to borrow $150,000 and decided to obtain a 20-year loan at a 9.5% interest rate. However, the monthly payments were higher than they could afford, so they decided on a 30-year loan to obtain lower monthly payments. (Round your final answers to two decimal places.) (a) Find the monthly payments for the 20-year and the 30-year loans. 20-year loan $ 30-year loan $ (b) Find the total amount paid over the life of each loan. 20-year loan $ 30-year loan $ (c) Find the savings per month by going to the 30-year loan. $ (d) Find the increased total cost by going to the 30-year loan. $

LaMar and Louise Hubbs moved from Alabama to the heart of Texas. They were delighted to find a Southern-style needed to borrow $150,000 and decided to obtain a 20-year loan at a 9.5% interest rate. However, the monthly payments were higher than they could afford, so they decided on a 30-year loan to obtain lower monthly payments. (Round your final answers to two decimal places.) (a) Find the monthly payments for the 20-year and the 30-year loans. 20-year loan $ 30-year loan $ (b) Find the total amount paid over the life of each loan. 20-year loan $ 30-year loan $ (c) Find the savings per month by going to the 30-year loan. $ (d) Find the increased total cost by going to the 30-year loan. $

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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2.) The Fiore’s are looking to reduce debt further so they decide to pay off their second car loan. a.) The original car loan of $31,243 was taken out one year ago at 2.9% for 5 years. Find the monthly payment. b.) Now, after one year The Fiore’s decide to add an extra $100 to the payment to pay off the loan sooner. How many additional years will it take to pay off the car loan?
Dan is considering borrowing $375,000 to purchase a new condo. Based on that information, answer the following questions. Show all work. Calculate the monthly payment needed to amortize an 8% fixed-rate 30-year mortgage loan. Calculate the monthly amortization payment if the loan in (a.) was for 15 years instead. In a few sentences, explain the effect of a smaller loan period. How does it influence the monthly payment and interest
This problem is a complex financial problem that requires several skills, perhaps some from previous sections.Clark and Lana take a 30-year home mortgage of $125,000 at 7.9%, compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1200 per month. (a) Find their regular monthly payment. (Round your answer to the nearest cent.) (a) Find their regular monthly payment. (Round your answer to the nearest cent.) (c) How many payments of $1200 will it take to pay off the loan? Give the answer correct to two decimal places. (d) Use your answer to part (c) to find how much interest they save by paying the loan this way. (Round your answer to the nearest cent.)
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This problem is a complex financial problem that requires several skills, perhaps some from previous sections.Clark and Lana take a 30-year home mortgage of $122,000 at 7.4%, compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1300 per month. (a) Find their regular monthly payment. (Round your answer to the nearest cent.)$ (b) Find the unpaid balance when they begin paying the $1300. (Round your answer to the nearest cent.)$ (c) How many payments of $1300 will it take to pay off the loan? Give the answer correct to two decimal places. monthly payments(d) Use your answer to part (c) to find how much interest they save by paying the loan this way. (Round your answer to the nearest cent.)
Jonathan wishes to borrow $180 000 from a commercial bank. He was told that the loan would be amortized over five years and that payment could be made at the beginning or at the end of each year. Please assist Jonathan by answering the following questions. a. Explain to Jonathan, what is the purpose of a loan amortization schedule? b. Jonathan borrows $180 000 at 9% per annum for five years. The loan is repayable in five equal instalments at the beginning of the year. What is the annual payment?
This problem is a complex financial problem that requires several skills, perhaps some from previous sections. Clark and Lana take a 30-year home mortgage of $124,000 at 7.5%, compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1400 per month. (a) Find their regular monthly payment. (Round your answer to the nearest cent.) $ (b) Find the unpaid balance when they begin paying the $1400. (Round your answer to the nearest cent.) $ (c) How many payments of $1400 will it take to pay off the loan? Give the answer correct to two decimal places. monthly payments (d) Use your answer to part (c) to find how much interest they save by paying the loan this way
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A few years back, Dave and Jana bought a new home. They borrowed $230,415 at an annual fixed rate of 5.49% (15-year term) with monthly payments of $1,881.46. They just made their 45th payment, and the current balance on the loan is $208,555.87. Interest rates are at an all-time low, and Dave and Jana are thinking of refinancing to a new 15-year fixed loan. Their bank has made the following offer: 15-year term, 3.0%, plus out- of-pocket costs of $2,937. The out-of-pocket costs must be paid in full at the time of refinancing. Build a spreadsheet model to evaluate this offer. The Excel function: =PMT(rate, nper, pv, fv, type) calculates the payment for a loan based on constant payments and a constant interest rate. The arguments of this function are: rate the interest rate for the loan nper = the total number of payments pv = present value (the amount borrowed) fv = future value [the desired cash balance after the last payment (usually 0)] type = payment type (0 = end of period, 1 =…

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