You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 300-month loan. However, you can afford monthly payments of only $800, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $800? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Balloon payment

You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend you the money at an APR of 5.35 percent for this 300-month loan. However, you can afford monthly payments of only $800, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $800? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Balloon payment

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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after making payments of $917.10 for 6 years on your 30-year loan at 8.3%, you decide to sell your home. what is the loan payoff?
You have an outstanding student loan with required payments of $550 per month for the next four years. The interest rate on the loan is 10% APR (monthly). You are considering making an extra payment of $200 today (that is, you will pay an extra $200 that you are not required to pay). If you are required to continue to make payments of $550 per month until the loan is paid off, what is the amount of your final payment? What effective rate of return (expressed as an APR with monthly compounding) have you earned on the $200?
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 9.00% APR (monthly). You are considering making an extra payment of $200 today (i.e., you will pay an extra $200 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of retum (expressed as an APR with monthly compounding) have you eamed on the $200? (Note: Be careful not to round any intermediate steps less than six decimal places.) If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? The final payment is $ (Round to the nearest cent.)
You have found your dream house. The selling price is 120,000. You will put $20,000 down and obtain a 25-year fixed-rate mortgage at 8.75% (APR compounded semiannually) for the rest. You plan to prepay the loan by making an additional payment each month along with your regular payment. How much extra must you pay each month if you wish to pay off the load in 20 years? (Assume there is no early payment penalty).
You have a loan outstanding. It requires making three annual payments of $8,000 each at the end of the next three years. Your bank has offered to allow you to skip making the next two payments in lieu of making one large payment at the end of the loan's term in three years. If the interest rate on the loan is 5%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is $ (Round to the nearest dollar.)
You are borrowing $250,000 to buy a house, using a standard, 30-year mortgage. Your mortgage lender offers a 5.50% mortgage with no points, or a 5.20% mortgage with X points. You plan on living in the house for exactly 84 months, paying only the required payment each month, and without refinancing your mortgage. What points will make you indifferent between the two mortgages? Use the 5.50% rate to discount cash flows between the two options. Note: all rates in the problem are nominal annual rates with monthly compounding. Recall, 1 point is 1% of the mortgage. Carry your answer to 2 decimal places. For example, if your answer is 1.255 points, answer "1.26". a
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 8% APR (monthly). You are considering making an extra payment of $150 today (that is, you will pay an extra $150 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of return (expressed as an APR with monthly compounding) have you earned on the $150?
You are considering buying a new house, and have found that a $250,000, 30-year fixed-rate mortgage is available with an interest rate of 8 percent. This mortgage requires 360 monthly payments of approximately $1,786 each. If the interest rate rises to 9 percent, what will happen to your monthly payment?
You are buying a house and will borrow $325,000 on a 25-year fixed rate mortgage with monthly payments to finance the purchase. Your loan officer has offered you a mortgage with an APR of 4.10 percent. Alternatively, she tells you that you can "buy down" the interest rate to 3.75 percent if you pay points up front on the loan. A point on a loan is 1 percent (one percentage point) of the loan value. How many points, at most, would you be willing to pay to buy down the interest rate? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.
You take out a 30-year mortgage (360 months) with a face value of $200,000 and a stated annual rate of 6.0 percent. As you can calculate, your required monthly payment is $1.199.10. However, with each payment, you send your lender an extra $250.00, which directly reduces the mortgage balance each month. What is the mortgage balance after 42 months? Enter your answer to the nearest cent, with no punctuation other than a decimal. For example, if your answer is $28,542.19, enter "28542.19". Note that Canvas will delete trailing zeros, if entered.
You need a 20-year, fixed-rate mortgage to buy a new home for $230,000. Your mortgage bank will lend you the money at a 6.6 percent APR for this 240-month loan. However, you can afford monthly payments of only $950, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $950? Multiple Choice O O $88,924.29 $103.581.46 $386,349.21 $374,758.73 O $401,803.18

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