Please show step by step how to solve this to answer A. and B. You have the following four choices of mortgage with monthly payments. Suppose that the market index will stay 10.5% after year 5. A. If you hold the loan for the entire term, what is the annual effective cost of each mortgage? B. How about if you only hold the loan for 5 years?

Please show step by step how to solve this to answer A. and B. You have the following four choices of mortgage with monthly payments. Suppose that the market index will stay 10.5% after year 5. A. If you hold the loan for the entire term, what is the annual effective cost of each mortgage? B. How about if you only hold the loan for 5 years?

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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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…
Please complete parts A through E. Attached is an example.
Please solve all parts. Attached is an example.
Suppose you are buying your first condo for $190,000, and you will make a $10,000 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at 3.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be? You are not required to show calculations. However to receive credit you must provide the inputs used (N, PMT, FV, I/Y, PV) to solve. If you utilize a template, you can copy and paste the section used in the submission. $808.28 $853.18 $527.78
Please show how to solve this using an Excel spreadsheet and please show the formulas. The maturity of the balloon loan is 5 years, amortization period is 30 years, loan amount is $85,000 with annual interest rate 4.5% and monthly payments. What is the monthly payment for this balloon mortgage? What is the balloon payment at the end of five years for this balloon mortgage?
Suppose you purchase a house using a 30-year fixed rate mortgage. The APR on the loan is 3.2% and you will be required to make monthly payments of $3,700 what is the price you paid for your home?
Please show how to solve this step by step using Excel to answer a. and b. You want to buy a house for main residence and have the following four choices of mortgage with monthly payments. Suppose that your marginal tax rate is 25% and the market index will stay 10.5% after year 5. a. If you hold the loan for the entire term, what is the annual effective cost of each mortgage before-tax? b. If you hold the loan for the entire term, what is the annual effective cost of each mortgage after-tax?
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?
show steps to calculation With screenshots of excel!!! As a borrower, you have the option to choose between two 30-year, monthly-payment loans: 7% interest rate with 3 points, versus 7.5% interest with one-half point. (a) Which loan option would you choose if you had a 10-year expected prepayment horizon? (b) Which would you choose if you expect to pay off this loan in 5 years?
9) Mortgage Payment You take out a 20-year fixed mortgage. The annual interest rate is ? = 0.10 and the monthly payment is $4,000. a. What is the total amount of this Mortgage? E.g., What is the PV of this mortgage payment stream? b. If you make an additional payment of $4,000 in period t=1 and period t=2, how long will it take to repay the mortgage?
Suppose you are buying your first condo for $250,000, and you will make a $7,500 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at 3.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be? You are not required to show calculations but you must list the inputs used such as N, PV, FV, etc. O $1,000.00 O $1,088.93 O $1,122.61
You have just made an offer on a new home and are seeking a mortgage. You need to borrow $620,000. a. The bank offers a 30-year mortgage with fixed monthly payments and an interest rate of 0.53% per month. What is the amount of your monthly payment if you take this loan? b. Suppose you take the 30-year mortgage described in part (a). How much will you still owe on the mortgage after 10 years? a. The bank offers a 30-year mortgage with fixed monthly payments and an interest rate of 0.53% per month. What is the amount of your monthly payment if you take this loan? Your monthly payment will be $nothing. (Round to the nearest cent.) b. Suppose you take the 30-year mortgage described in part (a). How much will you still owe on the mortgage after 10 years? The remaining loan amount will be $nothing.

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