The President of the United States makes$400,000 annually. While still in office, thepresident's family has decided to purchase ahome that has an estimated property tax of$50,000 and home insurance of $15,000annually. Let's assume that the president'sfamily has no loans or debt, and they havesaved a 35,000 down payment.What mortgage amount can they afford toborrow? Assume a 30-year fixed mortgagewith a rate of 3.25%. Round your answer tothe nearest cent.

Mortgage It is the loan that is being provided by the bank/mortgage lender which helps in enabling…

Answered: The President of the United States…

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

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After moving to Boston, Massachusetts, USA, Larry Winters borrowed $1,000,000 for a thirty year mortgage at a rate of 3.3% per annum. (His bank uses the US convention of quoting mortgage rates on a compounded monthly basis.) Larry will pay an equal amount each month, starting one month from now, for 30 years. His final payment will be exactly 30 years (or 360 months) from now. How large is Larry’s monthly mortgage payment? (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)
I need the answer of the question attached. Please provide all possible answers. Thank you!
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n this economy, there are 10,000 borrowers. Each person borrows $100 for a 1 year loan. For the lender not to make a loss, the lender must set an interest rate such that they earn at least as much as their outside option of not lending to people from all borrowers that did not default in this economy. In this case, the outside option is the risk-free interest rate on a 1-year US Treasury securtiy. The 1-year USTS pays annual interest rate of i = 0.03. What is the minimum interest rate that the lender will charge to borrow money in this economy
You want to buy a house that costs $280,000. You have $28,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $252,000. However, the realtor persuades the seller to take a $252,000 mortgage (called a seller take-back mortgage) at a rate of 6%, provided the loan is paid off in full in 3 years. You expect to inherit $280,000 in 3 years, but right now all you have is $28,000, and you can afford to make payments of no more than $19,000 per year given your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.) a. If the loan was amortized over 3 years, how large would each annual payment be? Do not round intermediate calculations. Round your answer to the nearest cent. $ Could you afford those payments? -Select- b. If the loan was amortized over 30 years, what would each payment be? Do not round intermediate calculations. Round your answer to the nearest cent. $ Could you afford those…
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Suppose you have just purchased your first home for $550,000. At the time of purchase you could only afford to commit to a down payment of $55,000. In order to make the loan, the lender requires you to obtain private mortgage insurance (PMI) on their behalf. Suppose over time you paid down the principal of the loan to $535,000 and at that point in time you can no longer make any mortgage payments (i.e., you default on the loan). If the lender were to foreclose on your property and sell it for $508,000 (net proceeds), what would the lender's loss of principal be taking into consideration the protection of mortgage insurance? (Let's assume that the PMI in this case covers the top 25% of the loan.)

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