The price of a home is $120,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 10% or 30-year fixed at 10%.Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15-year option? Use the following formula to determine theregular payment amount.PMT=A[[]]- ntFind the monthly payment for the 15-year option.$(Round to the nearest dollar as needed.)

Please find Answer belowExplanation:Step 1:Let,s calculate the monthly payment for the 15-year…

Answered: The price of a home is $120,000. The…

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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Problem: You are interested in a fixed-rate mortgage for $399,000 and need to choose the between options: a 15-year mortgage or a 30- year mortgage. The current mortgage rate is 3.75% for the 15-year mortgage, and 3.25% for the 30-year mortgage. Both require a 15% down payment. (Hint: make use of the amortization formula from Chapter 12). (a) What are the monthly principal and interest payments for EACH loan? Show your work. (b) What is the total amount of interest paid on EACH loan? Show your work. (c) Overall, how much more interest is paid by choosing the 30-year mortgage? Show your work.
Give typing answer with explanation and conclusion Suppose your gross monthly income is $5,900 and your current monthly payments are $575. If the bank will allow you to pay up to 36% of gross monthly income (less current monthly payments) for a monthly house payment, what is the maximum loan you can obtain if the rate for a 30-year mortgage is 4.65%? (Round your answer to the nearest cent.)
The price of a condominium is $187,000. The bank requires a 5% down payment and one point at the time of closing. The cost of the condominium is financed with a 30-year fixed-rate mortgage at 6.5%. Use the following formula to determine the regular payment amount. Complete parts (a) through (e) below. PMT = a. Find the required down payment. $9350 b. Find the amount of the mortgage. $177650 c. How much must be paid for the one point at closing? $1776 (Round to the nearest dollar as needed.) d. Find the monthly payment (excluding escrowed taxes and insurance). More Enter your answer in each of the answer boxes. 11:12 PM O Type here to search 81°F Mostly cloudy 22 99+ 6/30/2021 DELL F3 F4 FS F6 F7 F8 F9 F10 F11 F12 PrtScr Insert Delete కలnn Home Num $4 %24 & Backspace 8. R T K Enter (凸)
You are considering purchasing a new home. You will need to borrow $280,000 to purchase the home. A mortgage company offers you a 20-year fixed rate mortgage (240 months) at 9% APR (0.75% month). If you borrow the money from this mortgage company, your monthly mortgage payment will be closest to: O A. $2,015 В. $3,527 C. $4,030 D. $2,519
Suppose your gross monthly income is $5,300 and your current monthly payments are $625. If the bank will allow you to pay up to 36% of gross monthly income (less current monthly payments) for a monthly house payment, what is the maximum loan you can obtain if the rate for a 30-year mortgage is 4.65%? (Round your answer to the nearest cent.)
Use PMT= to determine the regular payment amount, rounded to the nearest dollar. The price of a home is $230,000. The bank requires a 20% down payment and three points at the time of closing. The cost of the home is financed with a 30-year foxed-rate mortgage at 6.5%. Complete parts (a) through (e) below. a. Find the required down payment. $ 46,000 b. Find the amount of the mortgage.
(please finanas question correct answer) You want to buy a $243.000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest. How much im the loan amount going to be? What will your monthly payments be if the interest rate is 5%? What will be your monthly payments if the interest rate is 6%?
3. You are purchasing a new home and need to borrow $325,000 from a mortgage lender. The mortgage lender quotes you a rate of 6.5% APR for a 30-year fixed rate mortgage (with payments made at the end of each month). The mortgage lender also tells you that if you are willing to pay one point, they can offer you a lower rate of 6.25% APR for a 30-year fixed rate mortgage. One point is equal to 1% of the loan value. So if you take the lower rate and pay the points, you will need to borrow an additional $3,250 to cover points you are paying the lender. Assuming that you do not intend to prepay your mortgage (pay off your mortgage early), are you better off paying the one point and borrowing at 6.25% APR or just taking out the loan at 6.5% without any points?
A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The loan will be $238,000 at 6 percent interest for 20 years. Required: a. hat would be the maturity period if payments are bi-weekly? How much will the borrower pay in total under each payment option? Which choice would be less costly to the borrower? Hint: Assume 26 total bi-weekly payments per year for the maturity period. b. Assume that the bi-weekly loan was available for 5.75%. What would be the maturity period if payments are bi-weekly? How much will the borrower pay in total under each payment option? Which choice would be less costly for the borrower? Complete this question by entering your answers in the tabs below. Required A Required B hat would be the maturity period if payments are bi-weekly? How much will the borrower pay in total option? Which choice would be less costly to the borrower? Hint: Assume 26 total bi-weekly payments maturity period. Note: (Do not round intermediate…
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 34-year mortgage loan for 80 percent of the $3,240,000 purchase price. The monthly payment on this loan will be $15,700. What is the APR on this loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the EAR on this loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Suppose that you get a 15-year mortgage for $100,000 at 6.75%.What is your monthly payment?(Fill in the blank below and round your answer to 2 decimal places.)Your monthly payment would be $______.

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