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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You have been asked to determine whether it is beneficial for a homeowner to refinance their current mortgage loan. Their loan for 200,000 was originated three years ago and was a 30 year FRM with an interest rate of 7.5%. Their mortgage payment is currently $1,398.43. This loan now currently has 27 years remaining, and the homeowner is looking to refinance their current balance (i.e. the balance at the end of month 36) into a new 27 year FRM with an interest rate of 5.5%. How much will the homeowner save in interest over the 27 years remaining, assuming no prepayments? Round to the nearest dollar.
TABLE 15.1 Amortization table (mortgage principal and interest per $1,000) Rate 2.000 2.125 2.250 2.375 2.500 2.625 2.750 2.875 3.000 3.125 3.250 3.375 3.500 3.625 3.750 3.875 4.000 4.125 4.250 4.375 4.500 4.625 4.750 4.875 5.000 5.125 5.250 5.375 5.500 5.625 5.750 5.875 6.000 6.125 6.250 6.375 6.500 6.625 6.750 6.875 7.000 7.125 7.250 7.375 7.500 7.625 7.750 7.875 8.000 Interest Only 0.16667 0.17708 0.18750 0.19792 0.20833 0.21875 0.22917 0.23958 0.25000 0.26042 0.27083 0.28125 0.29167 0.30208 0.31250 0.32292 0.33333 0.34375 0.35417 0.36458 0.37500 0.38542 0.39583 0.40625 0.41667 0.42708 0.43750 0.44792 0.45833 0.46875 0.47917 0.48958 0.50000 0.51042 0.52083 0.53125 0.54167 0.55208 0.56250 0.57292 0.58333 0.59375 0.60417 0.61458 0.06250 0.63542 0.64583 0.65625 0.66667 10 Year 9.20135 9.25743 9.31374 9.37026 9.42699 9.48394 9.54110 9.59848 9.65607 9.71388 9.77190 9.83014 9.88859 9.94725 10.00612 10.06521 10.12451 10.18403 10.24375 10.30369 10.36384 10.42420 10.48477 10.54556 10.60655…
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Ten years ago Jim took a mortgage loan of $200,000 to be repaid in 20 equal annual installments of $30,197.34. The bank has told him that they would accept $145,000 today as payment in full for the remainder of the loan. What is the balance on this loan? If we assume that Jim has the money, what interest rate must he earn on alternative investments in order not to accept the bank offer?
= You would like to buy a house that costs $350,000. You have $55,000 in cash that you can put down on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 7% per year. You can afford to pay only $23,060 per year. The bank agrees to allow you to pay this amount each year, yet still borrow $295,000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgage. How much will this balloon payment be? The balloon payment is $ (Round to the nearest cent.)
PLEASE ANSWER. I WILL UPVOTE I PROMISE
Mortgages, loans taken to purchase a property, involve regular payments at fixed intervals and are treated as reverse annuities. Mortgages are the reverse of annuities, because you get a lump-sum amount as a loan in the beginning, and then you make monthly payments to the lender. You’ve decided to buy a house that is valued at $1 million. You have $200,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your $800,000 mortgage, and is offering a standard 30-year mortgage at a 9% fixed nominal interest rate (called the loan’s annual percentage rate or APR). Under this loan proposal, your mortgage payment will be per month. (Note: Round the final value of any interest rate used to four decimal places.) Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on interest. If your bank approves a 15-year, $800,000 loan at…
You own a home that was recently appraised for $330,000. The balance on your existing mortgage is $117,450. If your bank is willing to loan up to 70% of the appraised value, what is the potential amount (in $) of credit available on a home equity loan?
You want to buy a house that costs $170,000. You have $17,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $153,000. However, the realtor persuades the seller to take a $153,000 mortgage (called no more than $17,000 per year given a seller take-back mortgage) at a rate of 10%, provided the loan is paid off in full in 3 years. You expect to inherit $170,000 in 3 years, but right now all you have is $17,000, and you can afford to make payments 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…
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…
16. Puan Siti intends to borrow from a bank to finance the cost of buying a house at Banting with a price of RM280,000. The bank has imposed this condition: • If income Puan Siti exceeding RM4,500 a month, then she is entitied to borrow 95% of the price of the house • If income Puan Siti is less than RM4,500 a month, then she entitled to borrow 90% of the price of the house. The Bank has imposed an interest of 6.5% per annum. It is understood the basic salaries of Puan Siti last year was RM3,250. For this year, she has received several increments as follows: i. Annual increment ai RM250 ii. Housing allowance increase by 10% from RM600 last year iii. Critical allowance increase by 5% from RM400 last year If Puan Siti wants to make a loan for 25 years, calculate: Total amount of loan Total overall payment Monthly payment to be paid a. b. С. houre at the price at RM302,000. Other

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