Principal (loan) $ 87,000 Payment per $1,000 $ 5.37 Monthly mortgage payment $ 467.19 Rate of Selling price of home Down payment $ 4,000 interest Years 30 $ 91,000 5% Assume the interest rate rises to 6.5%. What is the total cost of interest with the new interest rate? (Use Table 15.1.) (Do not roun intermediate calculations. Round your final answer to the nearest cent.) Total cost of interest
Principal (loan) $ 87,000 Payment per $1,000 $ 5.37 Monthly mortgage payment $ 467.19 Rate of Selling price of home Down payment $ 4,000 interest Years 30 $ 91,000 5% Assume the interest rate rises to 6.5%. What is the total cost of interest with the new interest rate? (Use Table 15.1.) (Do not roun intermediate calculations. Round your final answer to the nearest cent.) Total cost of interest
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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Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question
Transcribed Image Text:Use the following amortization chart:
Principal
(loan)
$ 87,000
Payment per
$1,000
$5.37
Monthly mortgage
payment
$ 467.19
Rate of
Selling price
of home
Down
interest Years
payment
$ 4,000
$ 91,000
5%
30
Assume the interest rate rises to 6.5%. What is the total cost of interest with the new interest rate? (Use Table 15.1.) (Do not round
intermediate calculations. Round your final answer to the nearest cent.)
Total cost of interest
acer
Σ
Transcribed Image Text:TABLE
15-1
Amortization table (mortgage principal and interest per $1,000)
INTEREST
Term
in years
31%
5%
5%
6%
7%
7%
8%
81%
9%
91%
10%
101%
11%
10
9.89
10.61
10.86
11.11
11.36
11.62
11.88
12.14
12.40
12.67
12.94
13.22
13.50
13.78
12
8.52
9.25
9.51
9.76
10.02
10.29
10.56
10.83
11.11
11.39
11.67
11.96
12.25
12.54
15
7.15
7,91
8.18
8.44
8.72
8.99
9.28
9.56
9.85
10.15
10.45
10.75
11.06
11.37
17
6.52
7.29
7.56
7.84
8.12
8.40
8.69
8.99
9.29
9.59
9.90
10.22
10.54
10.86
20
5.80
6.60
6.88
7.17
7.46
7.76
8.06
8.37
8.68
9.00
9.33
9.66
9.99
10.33
22
5.44
6.20
6.51
6.82
7.13
7.44
7.75
8.07
8.39
8.72
9.05
9.39
9.73
10.08
25
5.01
5.85
6.15
6.45
6.76
7.07
7.39
7.72
8.06
8.40
8.74
9.09
9.45
9.81
30
4.50
5.37
5.68
6.00
6.33
6.66
7.00
7.34
7.69
8.05
8.41
8.78
9.15
9.53
35
3.99
5.05
5.38
5.71
6.05
6.39
6.75
7.11
7.47
7.84
8.22
8.60
8.99
9.37
acer
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