You are looking to get a 30 year mortgage at 4%. You can afford $1,000 per month. a) What is the maximum principal you can borrow? $ b) Instead of a home, you decide to buy a duplex and rent out the other side for $500 a month. With this additional $500 added to your monthly payment, what is the maximum principal you can borrow? c) You buy a duplex for the amount of your answer in part (a), but apply the extra $500 to the mortgage (making your payment $1,500). How long does it take to pay off this loan in years? years

You are looking to get a 30 year mortgage at 4%. You can afford $1,000 per month. a) What is the maximum principal you can borrow? $ b) Instead of a home, you decide to buy a duplex and rent out the other side for $500 a month. With this additional $500 added to your monthly payment, what is the maximum principal you can borrow? c) You buy a duplex for the amount of your answer in part (a), but apply the extra $500 to the mortgage (making your payment $1,500). How long does it take to pay off this loan in years? years

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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You can afford a $950 per month mortgage payment. You've found a 30 year loan at 8% interest. a) How big of a loan can you afford? b) How much total money will you pay the loan company? c) How much of that money is interest?
Suppose you are buying your first condo for $190,000, and you will make a $10,000 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at 3.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be? You are not required to show calculations. However to receive credit you must provide the inputs used (N, PMT, FV, I/Y, PV) to solve. If you utilize a template, you can copy and paste the section used in the submission. $808.28 $853.18 $527.78
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You can afford a $1400 per month mortgage payment. You've found a 30 year loan at 7.9% interest.a) How big of a loan can you afford? (Round to the nearest cent, as needed.)$b) How much total money will you pay the loan company? (Round to the nearest cent, as needed.)$c) How much of that money is interest? (Round to the nearest cent, as needed.)$
You are buying a house and the mortgage company offers to let you pay a "point" (1% of the total amount of the loan) to reduce your APR from 6.50% to 6.25% on your $400,000, 30-year mortgage with monthly payments. If you plan to be in the house for at least five years, should you do it?
You can afford a $1500 per month mortgage payment. You've found a 30 year loan at 5.7% interest.a) How big of a loan can you afford? (Round to the nearest cent, as needed.)b) How much total money will you pay the loan company? (Round to the nearest cent, as needed.)c) How much of that money is interest? (Round to the nearest cent, as needed.)
You plan to purchase a house for $295000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early. Your bank offers you the following two options for payment. Option 1: Mortgage rate of 5.35 percent and 1 point. Option 2: Mortgage rate of 5.25 percent and 2 points. Which option should you choose?
You plan to purchase a house for $250,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price and monthly payments. You will not pay off the mortgage early. Your bank offers you the following two options for payment: Option 1: Mortgage rate of 3.75 percent and zero points. Option 2: Mortgage rate of 3.50 percent and 2 points. Which of the following is correct? Round your calculations/answers to two decimals. I. In exchange for $4,000 up front, Option 2 reduces your monthly mortgage payments by $28.14. II. The present value of the monthly savings is less than the points paid up front. III. Option 1 is the better choice. Formulas and Equations M = where P is principal, M is periodic payment, y interest rate, PVIFAny% = In period j, principal repayment is AMj = M Interest payment is is Ij = M[ ]=M - AMj Group of answer choices I only II only I and II only II and III only I, II, and III
Suppose you want to purchase a home for $525,000 with a 30-year mortgage at 4.64% interest. Suppose also that you can put down 30%. What are the monthly payments? (Round your answer to the nearest cent.)$ What is the total amount paid for principal and interest? (Round your answer to the nearest cent.)$ What is the amount saved if this home is financed for 15 years instead of for 30 years? (Round your answer to the nearest cent.)$
Let's say that you are planning to purchase a house. You have $32,000 set aside as a down payment towards teh purchase price of the house, and you are looking at a 20 year loan at 6.12% interest compounded monthly. Your financial planner has advised you that your mortgage payments for the year should not exceed 20% of your take-home pay. If your yearly take-home pay is $24,000, then find the maximum price of the house that you could purchase (while following the advice of your financial planner). Do not use TVM solver.
You want to buy a $216,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan at 3.25% interest for the rest.a) What is the amount of the down payment?b) What will the amount of the mortgage?c) The bank charges 2 points on the loan. What is the amount charged for points?
Your classmate tells you the details of the great deal he got on his mortgage: 30-year 1.1% fixed rate with a 20% down payment a.)If his new home costs $136,000, what is his down payment? b.)How much is he going to borrow to buy the house (assuming he only has the money to make the down payment from the previous part)? c.)Use Excel’s PMT function to determine how much his monthly payments would be. d.)How much will he pay in interest over the lifetime of this mortgage?

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