the 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 required $153,000. However, the realtor persuades you the seller to take $153,000 mortgage called a seller take-back mortgage) at a rate of 8% provided the loan is paid off in full in 3 years. You expect to inhen't $170,000 in 3 years, but right now all you have is $17,000 and afford to make payments of no more than you can $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? Round your answer to the nearest cent b) If the loan was amortized over 30 years, What would each payment be? Round to the nearest cent. your answer C) To satisfy the seller, the 30-year mortgage loan would be written as a balloon note, which means at the end of the third year, you would have to make the
the 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 required $153,000. However, the realtor persuades you the seller to take $153,000 mortgage called a seller take-back mortgage) at a rate of 8% provided the loan is paid off in full in 3 years. You expect to inhen't $170,000 in 3 years, but right now all you have is $17,000 and afford to make payments of no more than you can $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? Round your answer to the nearest cent b) If the loan was amortized over 30 years, What would each payment be? Round to the nearest cent. your answer C) To satisfy the seller, the 30-year mortgage loan would be written as a balloon note, which means at the end of the third year, you would have to make 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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Question
Transcribed Image Text:a
You want to buy
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 $153,000 mortgage called
a seller take-back mortgage) at a rate of 8%
provided the loan is paid off in full in 3 years.
expect to inhent $170,000 in 3 years, but
light now all you have is $17,000 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
things.)
end-of-year annual payments to simplify
p
a) If the loan was amortized over 3 years,
how large would each annual payment be? Round
your answer to the nearest cent
b) If the loan was amortized over 30 years,
What would each payment be? Round your answer
to the nearest cent.
C) To satisfy the seller, the 30-year mortgage loan would
be written as a balloun note, which means at the end
of the third year, you would have to make the
Transcribed Image Text:a
You want to buy
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 $153,000 mortgage called
a seller take-back mortgage) at a rate of 8%
provided the loan is paid off in full in 3 years.
expect to inhent $170,000 in 3 years, but
light now all you have is $17,000 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
things.)
end-of-year annual payments to simplify
p
a) If the loan was amortized over 3 years,
how large would each annual payment be? Round
your answer to the nearest cent
b) If the loan was amortized over 30 years,
What would each payment be? Round your answer
to the nearest cent.
C) To satisfy the seller, the 30-year mortgage loan would
be written as a balloun note, which means at the end
of the third year, you would have to make the
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