Problem: Justin and Hayley are interested in a fixed-rate mortgage for $450,000. They are undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 3.5% for the 15-year mortgage, and 3.85% for the 30-year mortgage. (a) What are the monthly principal and interest payments for EACH loan? (b) What is the total amount of interest paid on EACH loan? (c) Overall, how much more interest is paid by choosing the 30-year mortgage?

Problem: Justin and Hayley are interested in a fixed-rate mortgage for $450,000. They are undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 3.5% for the 15-year mortgage, and 3.85% for the 30-year mortgage. (a) What are the monthly principal and interest payments for EACH loan? (b) What is the total amount of interest paid on EACH loan? (c) Overall, how much more interest is paid by choosing the 30-year mortgage?

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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George is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $4, 500. He takes a 30 year fixed rate mortgage with 2. 13% interest rate and no fees. Assuming George repays the mortoage after 5 years, what is his annualized IRR on the loan? Write your answer as a percent rounded to two decimal points without the % sign (e.g. if you get 5.6499%, write 5.65).
Noor is buying a home with a $200,000 mortgage using a 5.5 percent, 30-year loan. How much of the first month's payment will go toward the principal if the payment per $1000 on this loan is $5.6779? O a. $917 O b. $219 O c. $0 O d. $538
13) Some financial advisors recommend that your monthly mortgage payment be no higher than 28% of your monthly net income. What is 28% of your monthly net income, as determined in question twelve? This is the estimated amount you can afford per month for a mortgage. 4,518*0.28 $1,265 28% of my monthly net income is $1,265. 14) We can calculate how much of a house you can afford using the loan formula. In question thirteen, you determined the monthly mortgage payment you can afford. Using this value for the regular monthly payment, calculate the present value (P), assuming you receive a 30-year mortgage (loan) with an annual interest rate of 6.328% with monthly compounding. (Note: This rate is realistic for a mortgage initiated in January 2024.) I need to use Loan formula to find the present value (P). please help me
Vishno
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If Bobby takes out a mortgage for 30 years at an interest rate of 4% and his monthly repayments are $835.48, what is the loan principal (that is, the balance of the loan at drawdown)? Give your answer to the nearest ten dollars. Do not include commas or the dollar sign in your answer.
Please Do both questions Edie wants to borrow $325,000 to purchase a new condominium in New York. What are her monthly payments for a fully amortizing 30-year fixed rate mortgage with a 4.5% contract rate? Ans:___ what are her monthly payments for a partially amortizing 25-year fixed rate mortgage with a 4.5% contract rate and 5-year maturity? Ans:___
1) The amount of down payment one makes on a home directly affects the size of the monthly payments a. True b. False 2) A monthly payment of $ 850 on a 30 year $ 80,000 mortgage results in a total cost of interest of $ 306,000. a. True b. False 3) What are the points on a mortgage?
1. Maria takes out a 30-year fixed rate mortgage at 5% to buy a house that costs $450,000. To avoid paying mortgage insurance, she needs to put 20% of the purchase price as a down payment. (a) How much does she need for the down payment? How much money does Maria need to borrow? (b) How much will Maria's monthly mortgage payments be? (c) How much interest will Maria pay over 30 years? What percentage of the total cost of the mortgage is the interest? (d) Maria could instead choose a 15-year fixed rate mortgage at 4.5%. Calculate her monthly payments and total interest paid with this option and compare these results to the answers you gave in (b). Assume she is still putting 20% down. (e) Calculate the future value of the two options below. Which option below gives her more wealth in 30 years? Option 1: Get the 30-year mortgage at 5% APR. Invest the difference in the mortgage payments in a stock index fund that has an average APR of 7.5%. Option 2: Get the 15-year mortgage at 4.5%.…
A mortgage loan is made to Mr. Jones for $30,000 at 10 percent interest for 20 years. If Mr. Jones has a choice between either a fully amortizing CPM or a CAM, which one would result in his paying a greater amount of total interest over the life of the mortgage? Would one of these mortgages be likely to have a higher interest rate than the other? Explain your answer.
3. Ann obtains a fully amortizing 30-year Fixed Rate Mortgage with monthly payments for the $1,500,000 at 7.05%. How much does Ann need to pay monthly? ( Explain well with proper step by step answer) .
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