You are looking at a one-year loan of $10,000. The Interest rate is quoted as 9.7 percent plus two points. A point on a loan is 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The Interest rate quotation in this example requires the borrower to pay two points to the lender up front and repay the loan later with 9.7 percent interest. What rate would you actually be paying here? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

You are looking at a one-year loan of $10,000. The Interest rate is quoted as 9.7 percent plus two points. A point on a loan is 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The Interest rate quotation in this example requires the borrower to pay two points to the lender up front and repay the loan later with 9.7 percent interest. What rate would you actually be paying here? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

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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Similar questions

Many mortgage lenders offer a way to lower your interest rate by paying some of the interest up front. This prepaid interest is known in the industry as points. Each point corresponds to 1% of the amount borrowed. In short, you're paying a fee to lower your interest rate. A lender offers you a 10-year fixed mortgage of $150,000 at 2.8% interest when you buy 1 point. Find the monthly payment. Do not round intermediate calculations. Round your answer to the nearest centavo. The monthly payment would be S x
A lender requires PMI that is 0.8% of the loan amount of $590,000. How much (in dollars) will this add to the borrower’s monthly payment? Round your answer to the nearest cent.
You plan to borrow $40,100 at a 6.9% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2? O a. $2,446.20 O b. $2,479.22 O c. $2,766.90 O d. $6,936.17 O e. $7,414.76
Consider a home mortgage of $125,000 at a fixed APR of 4.5% for 25 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest. ..... a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.)
Please eolve this question on excell and show formulas please.
If a lender makes a simple loan of $500 for 5 years and charges 3%, then the amount that the lender receive at maturity is $ (Round your response to the nearest two decimal place) If a lender makes a simple loan of $2000 for one year and charges $90 interest, then the simple interest rate on that loan is %. (Round your response to the nearest whole number) If a borrower must repay $106.50 one year from today in order to receive a simple loan of $100 today, the simple interest on this loan is OA. 6.0% OB. 6.5% OC. 65% OD. 5.0%
4) I have an NOI of$172,400. The lender indicated that I can borrow funds at a 7.0% interest rate with a 25 year amortization and 5 year term at a 1.20 Debt Service Ratio(DCR). The lender will charge 2 points. a. What is the monthly payment? b.What is the APR (annual percentage rate) if fully amortized? C.What is the APR at the end of the loan term? d.What if I pay the loan off at the end of the second year, what is my APR? e.What if there was a prepayment penalty of 1.5% at the end of year 4, what is myAPR?
Suppose you earn a gross income of $2,915.00 per month and apply for a mortgage with a monthly PITI of $900.74. You have other financial obligations totaling $174.90 per month. If the lending ratio guidelines are as given in the table below, what type of mortgage, if any, would you qualify for? Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% O FHA only O Conventional only O FHA and Conventional O None of the above
You take out a 15-year FRM for $500,000. The bank offers 5% interest rate but charges you a loan fee of 5% of the total loan amount. What is the actual cost of borrowing of this mortgage? 0.42% 0.48% 5.00% 5.79%
If you borrow $1,000 at 8.5% simple interest and the loan requires a lump sum payment of $1,213.16, what is the term of the loan? (Round your answer to the nearest whole number.)t = days
Consider a borrower who took a loan worth 10000 at the beginning of period 1. The loan is to be repaid over 20 periods. Furthermore, assume that the interest rate is equal to 5%. How much does the borrower owe in debt at the beginning of period 3? Don't use Excel
A loan officer states, "Thousands of dollars can be saved by switching to a 15-year mortgage from a 30-year mortgage." Calculate the difference in required monthly payments on a 30-year mortgage loan at a rate of 3.5% vs. a 15-year mortgage at a rate of 3.0%. Assume both mortgages are for $100,000 and require monthly payments. Then, comment on what you notice and where do the "savings" come from?

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