You decide to purchase a new home and need a $400,000 mortgage. You take out a loan from the bank that has an interest rate of 8%. 1. What is the yearly payment to the bank to pay off the loan in 30 years? 2. After 12 years, how much money do you still owe to the bank? (Outstanding Balance)? 3. Suppose the loan is arranged on a floating rate basis, and after 12 years the interest rate changes from 8% to 9%, how much will your yearly payment to the bank be after the change? You need to list the process of your calculation and the results. (You can either use excel or a calculator). Write your answer on a piece of paper, take a picture of your answer and upload it.
You decide to purchase a new home and need a $400,000 mortgage. You take out a loan from the bank that has an interest rate of 8%. 1. What is the yearly payment to the bank to pay off the loan in 30 years? 2. After 12 years, how much money do you still owe to the bank? (Outstanding Balance)? 3. Suppose the loan is arranged on a floating rate basis, and after 12 years the interest rate changes from 8% to 9%, how much will your yearly payment to the bank be after the change? You need to list the process of your calculation and the results. (You can either use excel or a calculator). Write your answer on a piece of paper, take a picture of your answer and upload it.
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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Transcribed Image Text:You decide to purchase a new home and need a $400,000 mortgage. You take out a loan from
the bank that has an interest rate of 8%.
1. What is the yearly payment to the bank to pay off the loan in 30 years?
2. After 12 years, how much money do you still owe to the bank? (Outstanding Balance)?
3. Suppose the loan is arranged on a floating rate basis, and after 12 years the interest rate
changes from 8% to 9%, how much will your yearly payment to the bank be after the change?
You need to list the process of your calculation and the results. (You can either use excel or a
calculator). Write your answer on a piece of paper, take a picture of your answer and upload it.
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