The interest rate for the first five years of a $95,000 mortgage is 7.2% compounded semiannually. Monthly payments are based on a 25-year amortization. Suppose a $3,000 prepayment is made at the end of the third year. What will be the principal balance at the end of the five-year term?

Q: The interest rate for the first five years of a $91,000 mortgage loan is 5.25% compounded…

A: Amortization of loan refers to the systematic and regular repayment of the loan and interest amount…

Q: or a 25-year mortgage of $200, 000 at 5(1)/(2)% interest, one additional payment of $5, 000 is paid…

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Q: You take out a 30-year mortgage, at a nominal annual rate of X%, with monthly compounding. Each…

A: Nominal Interest Rate: It represents the rate of interest that does not take into consideration the…

Q: You take out a 30-year mortgage, at a nominal annual rate of X%, with monthly compounding. Each…

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A: Given: Years = 15 Interest rate = 9% Loan amount = $200,000

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A: Amortization: It is the process of paying the loan by making periodic and regular payments. These…

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A: A loan's or an intangible asset's book value can be periodically reduced over a certain period of…

Q: You buy a house for $1,200,000 using a 30-year mortgage.  The annual interest rate is 3%.  Payments…

A: Using excel PV function

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A:

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A: It is assumed that the monthly payments made initially are at a rate of 8.4% compounded…

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A: A loan is a sum of money that is borrowed from a lender with the expectation that it will be paid…

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A: Compound = Monthly = 12Time = t = 30 * 12 = 360Payment = p = $2850.28Interest Rate = r = 5.39 / 12 %

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Q: A mortgage has an interest rate of 200 basis points over the treasury rate of 4%, an amortization…

A: Excel Spreadsheet:

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.