The house price is $700 thousand. You will fund $100 thousand of this upfront, and fund the remainder with a 30-year home mortgage loan. The mortgage payments will be monthly and your mortgage rate is an APR of 6.0%. Assume seven years go by. The market value of your house is now $500 thousand. How much equity do you have in your home? What is the seven-year rate-of-return on your home?

Q: a. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the…

A:

Q: Suppose you want to purchase a $ 240000 house. If you put 20% down and finance the rest in a 25 year…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: When you purchased your house, you took out a 30-year mortgage with an interest rate of 4.8% per…

A: Payoff amount refers to the amount which is required to be paid as principal amount of the loan. The…

Q: You are considering purchasing a new home. You will need to borrow AED 4,000,000 to purchase the…

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Q: You are considering buying a condo as an investment property. The condo will generate $20,000 a year…

A: Maximum you should pay for the property is the present value of future cashflows

Q: You want to buy a house financed with a 30-year fixed-rate mortgage. The best monthly interest rate…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: You found your dream house. It will cost you $300000 and you will put down $45000 as a down payment.…

A: Purchase Price of House= 300,000  Down payment = 45,000  Loan Amount = Purchase Price - Down payment…

Q: You planned to borrow $575,000 for a house at 2.9% interest for 30 years.  You find a house that you…

A: A loan is a sum of money obtained from outside sources such as banks and repaid over time in fixed…

Q: You buy a house for $230000, and take out a 30-year mortgage at 6% interest. For simplicity, assume…

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Q: You plan to invest $2,000 per year into a retirement account. If you earn a compound annual rate of…

A: Retirement planning is important to accumulate the amount for future use. The regular payment is…

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and…

A: A mortgage is a property loan given by banks to their customers for purchasing a house or other real…

Q: You plan to purchase a $200,000 house using either a 30-year mortgage obtained from your local…

A: Let us dissect the computations and provide a more comprehensive explanation. a. Interest and…

Q: You plan to purchase a $200,000 house using either a 30-year mortgage obtained from your local…

A: Let us dissect the computations and provide a more comprehensive explanation. a. Principal and…

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 30-year…

A: For the calculation I have used the above given formula and got the monthly payment to be…

Q: You know that you'll inherit $10,000 in 19 years. If you borrow $6,000 now and plan to pay it off…

A: Future value (F) = $10,000Initial borrowing amount (P) = $6,000Period (n) = 19 yearsAnnual interest…

Q: When you purchased your house, you took out a 30-year mortgage with an interest rate of 4.8% per…

A: The entire amount needed to fully satisfy a debt or other financial obligation is called the payoff…

Q: To buy a new house, you must borrow $140, 000. To do this, you take out a $ 140,000, 30-year, 9…

A: The annuity can be referred to as the amount paid each year as an installment on the amount of loan…

Q: Suppose you want to purchase a $ 210000 house. If you put 20% down and finance the rest in a 15 year…

A: Mortgage is a loan contact used to buy capital assets such as houses. In Mortgages, title of asset…

Q: You are interested in buying a piece of real estate property that could be worth $490,000 in four…

A: Present Value refers to a concept that states the discounted value or say value at today's time of…

Q: You can afford to pay $15,000 at the end of each of the next 30 years to repay a home loan. If the…

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Q: Suppose that you purchased a house with a $140,000 mortgage (30-year fixed at 6% with a payment of…

A: Refinancing refers to the change in financing conditions after the loan is carried for some tenure.…

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A: The question is calculation of amortization of mortgage loan at fixed monthly repayments. Formula…

Q: Suppose you want to purchase a $ 165000 house. If you put 20% down and finance the rest in a 30 year…

A: The monthly payment can be calculated with the help of present value of annuity function.

Q: A house costs $185,000. You take out a mortgage loan and put 20 percent down on the house. The…

A: Loans are paid in equal monthly installments that carry the payment of interest and loan payments.

Q: Let’s assume that you plan to purchase a house which is selling for $350,000 today. You will make a…

A: Formulas that are used:-

Q: You take out a 20​-year mortgage for ​$310,000 to buy a new house. What will your monthly payments…

A: A loan is the net amount of funds acquired by a person in the form of borrowings from the lender.…

Q: Suppose you want to purchase a home for $525,000 with a 30-year mortgage at 4.84% interest. Suppose…

A: Price of Home = $525000 Inetest Rate(r) = 4.84%/12 = 0.4033% Downpayment = 30% Amount financed…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.