Question 9:Ten years ago, Sarah and Ben bought a house in Cambridge, Ontario for $600,000. They made a down payment of $50,000 and took out a mortgage to cover the remaining$550,000. They have now paid $100,000 towards the mortgage principal. How much equity do they have in their home?O a. $50,000O b. $150,000O c. $550,000O d. $450,000

To find out how much equity Sarah and Ben have in their home, we need to calculate the current value…

Answered: Ten years ago, Sarah and Ben bought a…

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

See similar textbooks

Similar questions

1. You purchased two condos for $100,000 cash down, with loan and insurance payments of $1,500 3 month for the next 10 years. Your association fees are $150 amonth. You plan to rent out one of the condos to cover 80% of your housing expenses. What rent amount do you need to charge your tenant?
1. Larry borrowed $1,000 through a loan shark, two years later he ended up paying $1,500 to settle his debt. What was the interest rate on his loan?
A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They puchased their home 10 years ago for $61,760. The home was financed by paying 20% down and signing a 30-year mortgage at 8.1% on the unpaid balance. Equal monthly payments were made to amortize the loan over the 30-year period. The net market value of the house is now $100,000. After making their 120th payment, they applied to the loan company for the maximum loan. How much (to the nearest dollar) will they receive?
9. Jason bought a home in Arlington, Texas, for $127,000. He put down 25% and obtained a mortgage for 30 years at 6%. a. What is Jason’s monthly payment? (Do not round intermediate calculations. Round your answer to the nearest cent.) Monthly payment $ b. What is the total interest cost of the loan? (Use the amortization worksheet on the financial calculator.) Total interest cost $
Larry borrowed $1,000 through a loan shark, two years later he ended uppaying $1,500 to settle his debt. What was the interest rate on his loan?
Max and Minnie own their own home, subject to a mortgage in favour of theHemlington Building Society. They bought their house for £300,000 exactly five yearsago. They put down a deposit of £50,000 and financed the balance of the purchaseprice with the mortgage. The term of the mortgage was 25 years, and the rate ofinterest was fixed at 3.5%.Max and Minnie have asked you to explain the following things to them:a) why they have been paying the same sum every month, when they are surethat the amount of money they owe the Building Society has been goingdown;b) what that monthly sum is;c) how much they still owe the Building Society after 60 monthly payments;d) how much their new monthly repayments will be, if they take out a newmortgage, for the full amount which they currently owe, over a twenty-yearperiod, with an interest rate of 5.5%.
A couple wishes to borrow money using the equity in their home for collateral. A loan company will loan them up to 70% of their equity. They puchased their home 9 years ago for $64,386. The home was financed by paying 10% down and signing a 30-year mortgage at 9.6% on the unpaid balance. Equal monthly payments were made to amortize the loan over the 30-year period. The net market value of the house is now $100,000. After making their 108th payment, they applied to the loan company for the maximum loan. How much (to the nearest dollar) will they receive? Amount of loan: $ (Round to the nearest dollar.)
(a) Heather borrowed $5000 from her grandmother as a down payment on her first car. She promised to repay the debt in 2 years at 7% per annum, simple interest. How much should Heather repay her grandmother? (b) How much must Jason deposit in a special account paying interest at the rate of 9.5% to receive $75.21 in interest after 6 months? (c) An investment of $4500 gained $337.50 in intesest in 9 months. What rate of yearly intesest did the investment pay?
Shirley Trembley buys a house for $186,200. She puts 20% down and obtains a simple interest amortized loan for the balance at 11 3 8 % interest for thirty years. Ten years and six months later, she sells her house. Find the unpaid balance on her loan. (Round your answer to the nearest cent.)$
C. Assume Ron and his wife Julie, two young professionals, just bought a house for $600,000. They made a $100,000 down payment and borrowed the remainder at 4.25% fixed interest compounded monthly for 30 years. What will be Ron and Julie's monthly house payment on this amortizing loan?
a mother earned $15000.00 from royalties on her cookbook. She set aside 20% of this for a down payment for a new home. The balance will be used for her son's future education. She invested a portion of the money in a bank certificate of a deposit (cd account) that earns 4% and the remainder in a savings bond that earns 7%. IF the total interest earned after one year is $720.00, how much money was invested at each rate?
Your grandmother bought an annuity from Great-West Life Insurance Company for $361,220 when she retired. In exchange for the $361,220, Great-West will pay her $30,000 per year until she dies The interest rate is 6%. How long must she live after the day she retired to come out ahead (that is, to get more in value than what she paid in? -CHED She must live at least years. (Round up to the nearest whole year.)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS