Robert plans to take out a mortgage for a house he just bought for $1 million. Bank A is offering a 25-year mortgage at an annual percentage rate (APR), compounded monthly, of 4.5% and a 25% down payment. Bank B is offering a 30-year mortgage at an APR, compounded monthly, of 4.8% and a 10% down payment. (a) Calculate the monthly payment under Bank A's terms. (b) Calculate the monthly payment under Bank B's terms.
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- You plan to purchase a $100,000 house using a 30-year mortgage obtained from your local credit union. The mortgage rate offered to you is 8.25 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Calculate the amount of interest and, separately, principal paid in the 25th payment. (pls show solution)You plan to purchase a $130,000 house using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is 5.25 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the first six payments.You are considering an option to purchase or rent a single residential property. You can rent it for $2,000 per month and the owner would be responsible for maintenance, property insurance, and property taxes. Alternatively, you can purchase this property for $200,000 and finance it with an 80 percent mortgage loan at 4 percent fixed-rate interest that will fully amortize over a 30-year period. The loan requires monthly payments. The loan can be prepaid at any time with no penalty. You have done research in the market area and found that (1) properties have historically appreciated at an annual rate of 2 percent per year, and rents on similar properties have also increased at 2 percent annually; (2) maintenance and insurance are currently $1,500.00 each per year and they have been increasing at a rate of 3 percent per year; (3) you are in a 24 percent marginal tax rate and plan to occupy the property as your principal residence for at least four years; (4) the capital gains exclusion…
- You are purchasing a house and you are considering getting a fixed-rate mortgage (FRM) for $750,000. Your bank offers you a standard fully-amortizing 30-year mortgage that requires monthly payments and has an interest rate of 4.8% (APR with monthly compounding). Compute the required monthly payments for the mortgage.An individual wishes to purchase a house that is selling for $200,000. The person has $50,000 they can use as a down-payment towards the purchase of the house. The bank is offering a 5-year Term with an interest rate of 10% compounded monthly. The mortgage amount will be amortized over a period of 10-years. What are the individual's monthly payments? How much of the original amount of the mortgage is still outstanding at the end of the 5-year Term of the mortgage disçussed in Part 1 of this problem?You and your spouse have found your dream home. The selling price is $220,000; you will put $50,000 down and obtain a 30-year fixed-rate mortgage at 12% compounded monthly for the balance. a) Assume that monthly payments begin in one month. What will each payment be? b) How much interest will you pay (in dollars) over the lifetime of the loan? (Assume you make each of the required 360 payments on time.) c) Although you will get a 30-year mortgage, you plan to prepay the loan by making an additional payment each month along with your regular payment. How much extra must you pay each month if you wish to pay off the loan in 20 years?
- The Mrtinezes are planning to refinanace their home (assuming that there are no additional finance charges). The outstanding balance on their original loan is $100,000. Their finance company has offerend them two options: option a: A fixed rate mortage at an interest rate of 6.5%per year compounded monthly, payable over a 25 year period in 300 equal monthly installments. option b: A fixed rate mortgage an interest rate of 6.25% per year compounded monthly, payable over a 15 year period in 180 equal montly installments. a)find the monthly payment required to amortize each of these loans over the life of the loan (round to the nearest cent) option a option b b) HOw much interst would the Martinezessave in they chose the 15 year mortgage instead of the 25 year mortgage? Use the rounded mothly payment values from part a ( round your answer to the nearest cent)You plan to purchase a $390,000 house using either a 30-year mortgage obtained from your local savings bank with a rate of 8.50 percent, or a 15-year mortgage with a rate of 7.55 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid? b. Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. Interest under 15-year mortgage Interest under 30-year mortgage Difference in interest paid b. Monthly payment under 15-year mortgage Monthly payment under 30-year mortgage Difference in monthly paymentyou are buying a house and will borrow $225,000 on a 30-year fixed reate mortgage with monthly payments to finance the purchase. your loan officer has offered you a mortgage with an APR of 4.3%. Alternatively, she tells you that you can “ buy down ” the interest rate to 4.05% if you pay points up front on the loan is 1 % ( one percentage point) of the loan value. you believe that you will live in the house for only eight years before selling the house and buying another house. this means that in eight years, you will pay off the remaining balance of the original mortgage. how many points, at most, would you be willing to pay to buy down the interest rate? Question) maximum points?
- You plan to purchase a $200,000 house using either a 30-year mortgage obtained from your local savings bank with a rate of 7.25 percent, or a 15-year mortgage with a rate of 6.50 percent. You will make a down payment of 20 percent of the purchase price.a. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid?b. Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages?Mr. Smith wants to buy a new car that willcost $35,000. He will make a down payment in theamount of $15,000. He would like to borrow theremainder from a bank at an interest rate of 12%compounded monthly. He agrees to pay off the loanmonthly for a period of five years. Select the correctanswer for the following questions:(a) What is the amount of the monthly payment A?i. A = $20,000(A/F, 1%, 60)ii. A = $20,000(A/P, 12%, 5)/12iii. A = $20,000(A/P, 1%, 60)iv. A = $4,000(A/F, 12%, 5)/12(b) Mr. Smith has made 36 payments and wants tofigure out the balance remaining immediatelyafter the 36th payment. What is that balance?You are buying a house and will borrow $225,000 on a 30-year fixed rate mortgage with monthly payments to finance the purchase. Your loan officer has offered you a mortgage with an APR of 4.55 percent. Alternatively, she tells you that you can "buy down" the interest rate to 4.35 percent if you pay points up front on the loan. A point on a loan is 1 percent (one percentage point) of the loan value. How many points, at most, would you be willing to pay to buy down the interest rate? (Do not round intermediate calculations and round your answer to 3 decimal places, e. g., 32.164.)

