KThe price of a home is $180,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 8.5% or 30-year foxed at 8.5% Calculate theamount 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 the regular payment amountPMT=[-]Find the monthly payment for the 15-year option.(Round to the nearest dollar as needed.)Find the monthly payment for the 30-year option.(Round to the nearest dollar as needed.):Calculate the total cost of interest for both mortgage options. How much does the buyer save in interest with the 15-year option?(Use the answers from parts 1 and 2 to find this answer)

Monthly payment refers to the periodic payment made at every month including the amount of fixed…

The price of a home is $180,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 8.5% or 30-year fixed at 8.5% 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 the regular payment amount 1-691 PMT= Find the monthly payment for the 15-year option (Round to the nearest dollar as needed.) Find the monthly payment for the 30-year option (Round to the nearest dollar as needed) Calculate the total cost of interest for both mortgage options How much does the buyer save in interest with the 15-year option? 0 (Use the answers from parts 1 and 2 to find this answer)

The price of a home is $180,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 8.5% or 30-year fixed at 8.5% 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 the regular payment amount 1-691 PMT= Find the monthly payment for the 15-year option (Round to the nearest dollar as needed.) Find the monthly payment for the 30-year option (Round to the nearest dollar as needed) Calculate the total cost of interest for both mortgage options How much does the buyer save in interest with the 15-year option? 0 (Use the answers from parts 1 and 2 to find this answer)

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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Assume you need a $87,000.00 loan for a home. Compute the monthly payment for each option. Assume that the loans are fixed rate and that closing costs are the same in both cases. Round to the nearest penny.Option 1: a 30 year-loan at an APR of 7.25%The monthly payment for Option 1 would be $.Option 2: a 15 year-loan at an APR of 6.5%The monthly payment for Option 2 would be $
Phil Pittman is interested in a fixed-rate mortgage for $200,000. He is undecided whether to choose a 15- or 30-year mortgage. The current mortgage rate is 8% for the 15-year mortgage and 8.5% for the 30-year mortgage. (Round your answers to the nearest dollar. Use this table, if necessary.) (a) What are the monthly principal and interest payments (in $) for each loan? 15-year mortgage $ 1,911.304 30-year mortgage $ 1,537.827 (b) What is the total amount of interest (in $) paid on each loan? 15-year mortgage $ 30-year mortgage $ (c) Overall, how much more interest (in $) is paid by choosing the 30-year mortgage?
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
Find the monthly payment for the 15- year option.
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.

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