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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Joe Levi bought a home in Arlington, Texas, for $160,000. He put down 30% and obtained a mortgage for 30 years at 6 1/8 %. What is the difference in interest cost if he had obtained a mortgage rate of 5 1/2 %? (Use Table 15.1.)
TABLE 15.1 | Amortization table (mortgage principal and interest per $1,000) | ||||||
Rate | Interest Only | 10 Year | 15 Year | 20 Year | 25 Year | 30 Year | 40 Year |
5.5 | 0.45833 | 10.85263 | 8.17083 | 6.87887 | 6.14087 | 5.67789 | 5.1577 |
5.625 | 0.46875 | 10.91467 | 8.23732 | 6.94966 | 6.21575 | 5.75656 | 5.24302 |
5.75 | 0.47917 | 10.97692 | 8.3041 | 7.02084 | 6.29106 | 5.83573 | 5.32888 |
5.875 | 0.48958 | 11.03938 | 8.37118 | 7.09238 | 6.36682 | 5.91538 | 5.41525 |
6 | 0.5 | 11.10205 | 8.43857 | 7.16431 | 6.44301 | 5.99551 | 5.50214 |
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