Sunny wants to buy Gurjit's home in Victoria. Four years ago, Gurjit financed the $1,500,000 property with a cash down payment of $300,000 and private financing. The remaining portion of the purchase price was financed by Gurjit's friend, David, who lent the money to Gurjit at a rate of j2 = 6.25%, fully amortized over 25 years, with monthly payments of $7,856.90. Sunny is offering Gurjit a down payment of $250,000 and Sunny will assume the existing mortgage, which has 21 years remaining in the term. The current market rate of interest for similar mortgages is j2 = 7%.Question 16What is the market value of Sunny's offer, rounded to the nearest dollar?$1,040,231$1,294,238$929,698$1,035,889 Question 17Assume instead that Gurjit's loan from David had a 5-year term with an outstanding balance of $1,081,798.70 owing at the end of the term (there is one year remaining in the term). The current market rate for 1-year term mortgages is 4.95% per annum, with semi-annual compounding. If all other factors remain as above, what is the market value of Sunny's offer, rounded to the nearest dollar?$1,514,521$1,481,461$1,264,521$1,372,002

Explanation: Question 16: The market value of Sunny's offer is calculated by adding the down payment…

Answered: Sunny wants to buy Gurjit's home in…

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

Section: Chapter Questions

Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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Sunny wants to buy Gurjit's home in Victoria. Four years ago, Gurjit financed the $1,500,000 property with a cash down payment of $300,000 and private financing. The remaining portion of the purchase price was financed by Gurjit's friend, David, who lent the money to Gurjit at a rate of j₂ = 6.25%, fully amortized over 25 years, with monthly payments of $7,856.90. Sunny is offering Gurjit a down payment of $250,000 and Sunny will assume the existing mortgage, which has 21 years remaining in the term. The current market rate of interest for similar mortgages is j₂ = 7%.

Question 16

What is the market value of Sunny's offer, rounded to the nearest dollar?

$1,040,231

$1,294,238

$929,698

$1,035,889

Question 17

Assume instead that Gurjit's loan from David had a 5-year term with an outstanding balance of $1,081,798.70 owing at the end of the term (there is one year remaining in the term). The current market rate for 1-year term mortgages is 4.95% per annum, with semi-annual compounding. If all other factors remain as above, what is the market value of Sunny's offer, rounded to the nearest dollar?

$1,514,521

$1,481,461

$1,264,521

$1,372,002

Expert Solution