Tom borrowed $80,000 at a rate of 6.5% from bank for his new house. This is a 30 year monthly paid fully amortized mortgage.  By how much would he reduce the amount he owes in the first year? Group of answer choices 678 0 894 1120

Q: What is the difference in interest cost if he had obtained a mortgage rate of 5 1/2 %

A: First we need to determine the loan amount. This can be determined with the formula below:In the…

Q: Derek borrows $263,197.00 to buy a house. He has a 30-year mortgage with a rate of 5.93%. After…

A: A mortgage loan payment is a regular, typically monthly, installment made by a borrower to repay a…

Q: A couple buys a $190000 home, making a down payment of 17%. The couple finances the purchase with a…

A: Loans are paid by the equal monthly payments that are paid by the equal monthly installments and…

Q: Munawar is a first time buyer and bought a brand new townhouse in Oshawa for $212 000. He has saved…

A: The main concept of the question is to calculate the maximum initial mortgage balance for Munawar, a…

Q: Solve it correctly please.

A: A savings certificate is a long-term savings account with a fixed interest rate and a defined…

Q: Vipula De Silva has just bought a boat by taking an unconventional 13 year, $82,884 mortgage from…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: 4. J.D. Homeowner has just bou ght a house with a 20-year, 9%, $70,000 mortgage on which his is…

A: The PMT function is a type of financial function which helps to determine the total monthly payment…

Q: Nate agreed to pay $550,000 for a house. He made a $125,000 down payment and financed the balance…

A: We need to use loan amortization formula below to calculate monthly payment PMT =P*i1-1(1+i)n where…

Q: Wally Bee purchased a new home for $500,000 with a $80,000 down payment. He financed the remainder…

A: Interest is generally calculated on unpaid loan  amount. In this question person W paid a sum of…

Q: Dan buys a property for $280,000. He is offered a 25-year loan by the bank, at an interest rate of…

A: Loan amortization is the systematic process of gradually reducing the outstanding balance on a loan…

Q: Gary purchased a house and obtained a 30 - year loan of $250,000 at an annual interest rate of 6.75%…

A: Using excel PMT and PV function

Q: Mr. and Mrs. Smith have taken out a mortgage loan of $250,000.00 from a bank at 6% APR for a fixed…

A: The mortgage loans are secured loans and they are the main source of finance in the real estate and…

Q: A borrower purchased a $250,000 house with 5 percent down payment taking a mortgage loan for the…

A: Value of Mortgage Loan =$250000×(100-5)%=$237500Coverage of Private Mortgage Insurance Cover =6% of…

Q: An investor purchased a house 10 mortgage loan for $300,000. The m of 5 percent compounded monthly…

A:

Q: The Hogansons purchase a new home for $225,000. They make a 25% down payment and finance the remain…

A: Loans are paid by equal fixed monthly payments that carry the payment for interest and loan both.

Q: 14. Francisco Lindor borrows $73,000 at 12 percent interest toward the purchase of a mortgage is for…

A: Annual payments are periodic fixed payments that include the payment for interest and payment for…

Q: he Nicols are buying a house selling for ​$435,000. They pay a down payment of ​$35,000 from the…

A: Data given: Cost of house = $435,000 Down payment= $35,000   Required: Amount of the​ mortgage= ?

Q: Assume Jenny took out a $400,000 mortgage to pay for her new house. The mortgage rate is 5.7%. It is…

A: Information Provided: Mortgage amount = $400,000 Interest rate = 5.70% Period = 25 years

Q: Sam and Mary purchased a two-bedroom town house for $599 000 with a 10% down payment. The mortgage…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: You wish to buy your first home. Your annual gross income is $84,000. You also have monthly payments…

A: Mortgage loans are given on the basis of monthly income and other expenses related to the housing…

Q: Five years ago, the Kellmans purchased a house and took out a mortgage of $600,000 from the BMO…

A: rate positively . EAR =   (1+2.79%/2)^2-12.81%      APR (monthly compounding)…

Q: Ben Brown bought a home for $225,000. He put down 20%. The mortgage is at 6 ½% for 30 years. Using…

A: Total Present Value = $225,000 Down payment = 20% EMI = P x r x [(1+r)n / (1+r)n - 1]

Q: Jason bought a home in Arlington, Texas, for $127,000. He put down 25% and obtained a mortgage for…

A: Price of home = $ 127000 Down payment = 25% Loan amount (PV) = 127000*(1-0.25)…

Q: PART B.) George is loaned $100,000 in Year 0. Approximately (round up to the nearest year) many…

A: Any sum borrowed to meet specific personal or business funding needs is recognized as a…

Q: Jason is buying a home with a $150,000 mortgage using a 6 percent, 15-year loan. How much of the…

A: Loan amortization schedule represents the amount of periodic payments composed of the interest…

Q: If George wants to purchase a new home for $400,000 and finance $320,000 with a 4%, 30 year mortgage…

A: Calculate the monthly payment as follows: Monthly payment is $1527.73.

Q: (a) Heather borrowed $5000 from her grandmother as a down payment on her first car. She promised to…

A: As per Bartleby honor code, when multiple questions are asked, the exe=pert is required only to…

Q: Donelle just purchased a new home with a $400,000 mortgage with a fixed rate of 8.5% (APR) and a…

A: M is the total monthly mortgage payment.P is the principal loan amount (which is $400,000 in this…

Q: Noel purchases a house and gets a 30-year mortgage for $195,000 at 5.5 % APR. In addition to the…

A: The escrow account is normally required by the mortgage lender and it is requested by the borrower.…

Q: Brad decides to purchase a $295,000$⁢house. He wants to finance the entire balance. He has received…

A: A loan is a type of financial agreement whereby a lender gives a borrower a certain amount of money,…

Q: If I purchase a home for $150,000. I do a fixed 30-year mortgage at 6%. I have to put down 10% or…

A: Monthly payment = Loan Amount/Annuity factor Annuity factor = (1 - (1+r)^(-n) )/r r = monthly…

Q: Assume Ron and his wife Julie, two young professionals, just bought a house for $600,000. They made…

A: A mortgage refers to a covered loan borrowed for the purchase or maintenance of a property with the…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.