Use the following information to answer Q1-2. You are applying for a mortgage, and you know the most you can afford to pay is $1,300 every week (52 payments per year). You have been quoted an APR of 4.95% with semi-annual compounding and you plan to amortize the cost of the house over 25 years. 1. What is the effective periodic rate? A. 0.0941% B. 0.0952% C. 0.0964% D. 2.5740% E. 1.1899% Answer: A 2. Based on what you can afford to pay weekly, what is the maximum amount you can borrow? A. 273,139.83 B. 963,332.22 C. 969,234.60 D. 974,869.37 E. 3,310,112.67 Answer: D
Use the following information to answer Q1-2. You are applying for a mortgage, and you know the most you can afford to pay is $1,300 every week (52 payments per year). You have been quoted an APR of 4.95% with semi-annual compounding and you plan to amortize the cost of the house over 25 years. 1. What is the effective periodic rate? A. 0.0941% B. 0.0952% C. 0.0964% D. 2.5740% E. 1.1899% Answer: A 2. Based on what you can afford to pay weekly, what is the maximum amount you can borrow? A. 273,139.83 B. 963,332.22 C. 969,234.60 D. 974,869.37 E. 3,310,112.67 Answer: D
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
A2)
Economics
please show me how we get the come to the Answer of D fir Number 2. please show all steps and formulas you used to get to the answer. kind regards
Transcribed Image Text:Use the following information to answer Q1-2.
You are applying for a mortgage, and you know the most you can afford to pay is $1,300 every week (52
payments per year). You have been quoted an APR of 4.95% with semi-annual compounding and you
plan to amortize the cost of the house over 25 years.
1. What is the effective periodic rate?
A. 0.0941%
B. 0.0952%
C. 0.0964%
D. 2.5740%
E. 1.1899%
Answer: A
2. Based on what you can afford to pay weekly, what is the maximum amount you can borrow?
A. 273,139.83
B. 963,332.22
C. 969,234.60
D. 974,869.37
E. 3,310,112.67
Answer: D
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