You have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. What is the ending balance on the mortgage after the first year?
You have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term. What is the ending balance on the mortgage after the first year?
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 have located a warehouse property to purchase at a price of $320,000. You plan to make a 20% downpayment of $64,000. Interest rates are rising quickly, but you’ve managed to secure a fixed-rate commercial mortgage at 4.5%. Commercial mortgages are typically much shorter than consumer mortgages like home loans, so the lender has offered you a 10-year term.
What is the ending balance on the mortgage after the first year?
Expert Solution
Given Information:
Purchase price of mortgage is $320,000
Down payment is of 20% or $64,000
Fixed interest rate is of 4.5%
Term of loan us 10 year
To Find:
- Ending balance after first year
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