You and your spouse have found your dream home. Theselling price is $220,000; you will put $50,000 down andobtain a 30-year fixed-rate mortgage at 12% compoundedmonthly for the balance.a) Assume that monthly payments begin in one month.What will each payment be?b) How much interest will you pay (in dollars) over thelifetime of the loan? (Assume you make each of therequired 360 payments on time.)c) Although you will get a 30-year mortgage, you plan toprepay the loan by making an additional payment eachmonth along with your regular payment. How much extramust you pay each month if you wish to pay off the loanin 20 years?

Part a: Monthly PaymentsGiven:Loan amount = $220,000 - $50,000 = $170,000Interest rate = 12% per…

Answered: You and your spouse have found your…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose you take out a $117,000, 20-year mortgage loan to buy a condo. The interest rate on the loan is 5%. To keep things simple, we will assume you make payments on the loan annually at the end of each year. a. What is your annual payment on the loan? b. Construct a mortgage amortization. c. What fraction of your initial loan payment is interest? d. What fraction of your initial loan payment is amortization? e. What is the total of the loan amount paid off after 10 years (halfway through the life of the loan)? f. If the inflation rate is 3%, what is the real value of the first (year-end) payment? g. If the inflation rate is 3%, what is the real value of the last (year-end) payment? h. Now assume the inflation rate is 6% and the real interest rate on the loan is unchanged. What must be the new nominal interest rate? i-1. Recompute the amortization table. i-2. What is the real value of the first (year-end) payment in this high-inflation scenario? j. What is the real value of the last…
You plan to purchase a $310,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 5.10 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. (1) Construct the amortization schedule for the mortgage. b. (2) How much total interest is paid on this mortgage?
suppose you are buying your first condo for 145,000 and you will make $15,000 down payment. you have arranged to finnace the remainder with a 30 year monthly payment amortized mortgage at a 55 nominal interest rate with first payment due in one month what will your monthly payments be? how much of first month payment is the prindipal
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Let’s assume that you plan to purchase a house which is selling for $350,000 today. You will make a monthly payment for the next 30 years, with an annual interest rate of 3%. What will be the amount of your monthly mortgage (i.e., home loan) payment? answer choices $1,890.37 $1,400.01 $1,475.61 $1,228.14
Suppose you are buying your first condo for $180,000, and you will make a $15,000 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be?
Suppose you are buying your first home for $144,000, and you have $17,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.40% nominal interest rate, with the first payment due in one month. What will your monthly payments be? Group of answer choices $831.93 $857.64 $753.30 $714.27 $794.39
Suppose you are buying your first home for $210,000, and you have $15,000 for your down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at a 6.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be? Select the correct answer. a. $1,231.53 b. $1,233.53 c. $1,232.53 d. $1,234.53 e. $1,230.53
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Calculate the monthly mortgage payments under the following conditions: $325,000 mortgage, 3.125% interest, 30 years. How much interest will you pay for the first month? How much principal will you pay? What is your new loan balance? How much TOTAL do you pay for that mortgage?
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You plan to purchase a $320,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 5.20 percent. You will make a down payment of 15 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. (1) Construct the amortization schedule for the mortgage. b. (2) How much total interest is paid on this mortgage? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B1 Amortization Schedule Month 1 2 3 179 180 Construct the amortization schedule for the mortgage? (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Req 82 Total Interest Amortization Schedule for the 15-Year Mortgage Interest Cumulative Principal Principal 272,000.00 270,999.26 Cumulative Interest Ending Balance

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