Question 1You can afford to pay $2,500 per month for mortgage payments. How large a loan can you afford if theinterest rate is 3.75% for a 30-year fixed mortgage? Round to the nearest cent or two decimal places.Answer: $423,529.41Question 2Suppose you owe your credit card company $12,000. You are given the option to pay it off per month inequal monthly payments at a rate of 25%.a. How much is your monthly payment if you decide to pay off the debt in t-2 years?$750b. How much is your monthly payment if you decide to pay off the debt in t=4 years?$500

Question 1Step 1: Identify the relevant informationMonthly payment: $2,500.00Interest rate: 3.75%…

Answered: Question 1 You can afford to pay $2,500…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3. A loan used for buying a home is called a mortgage. The Fortunato family is borrowing $430,000 to buy a home. They are taking out a 30-year mortgage at a rate of 3.55%. What is the monthly payment? 3. b. What is the total amount paid?
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You want to buy a car and therefore you borrowed $10,000 from a bank today for 6 years. The nominal interest rate that the bank charges is 7.2%. If you start making equal monthly payments beginning today then what will be your approximate monthly installment? Group of answer choices $170.43 $154.31 $160.31 $171.45
Many mortgage lenders offer a way to lower your interest rate by paying some of the interest up front. This prepaid interest is known in the industry as points. Each point corresponds to 1% of the amount borrowed. In short, you're paying a fee to lower your interest rate. A lender offers you a 10-year fixed mortgage of $150,000 at 2.8% interest when you buy 1 point. Find the monthly payment. Do not round intermediate calculations. Round your answer to the nearest centavo. The monthly payment would be S x
Problem: Please answer the following questions regarding a $300,000 Mortgage Loan with monthly amortization over 30 years and an annual interest rate of 6%. What is the loan payment for a (30 year loan (360 monthly payments) of $300,000 at 6%? Question Answer What is the monthly payment amount? Loan Monthly Payment: How much interest and how much is principle on the first payment? Interest: Principle: How much interest and how much is principle on the second payment? Interest: Principle: If after the second payment an addition $10,000 was paid on principle. How much would the interest be on the third payment? Interest:
You can afford a $1350 per month mortgage payment. You've found a 30 year loan at 8% interest. a) How big of a loan can you afford? $ 142,944 b) How much total money will you pay the loan company? $ 486,012. X c) How much of that money is interest? $ 343,058.82 X
2.1 Explain the difference between a nominal interest rate and an effective interest rate. 2.2 A bank has quoted the interest rate on a loan at 15% compounded quarterly. Calculate the effective rate. 2.3 You need R70 000 in 6 years’ time in order to afford a new car. If you are able to earn interest at 8% compounded annually, how much do you need to invest today in order to afford the car? 2.4 If you had R30 000 today, at what annual interest rate would you need to invest your money in order to have the required R70 000 in 6 years’ time
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15. Mortgage payments Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You've decided to buy a house that is valued at $1 million. You have $300,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $700,000 mortgage, and is offering a standard 30-year mortgage at a 12% fixed nominal interest rate (called the loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate in percentage form to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a…
Question 11 You want to buy a $227,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan for the rest. a) How much is the loan amount going to be? b) What will your monthly payments be if the interest rate is 5%? c) What will your monthly payments be if the interest rate is 6%?

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