You plan to purchase a $500,000 home with a 20% down payment. You can take out a 30-year FRM of $400,000 at an APR of 7.2%. (1) What is your monthly payment? (2) If you make regular monthly payments, how long will it take to pay off half of the loan? (i.e., reduce the principle of the loan balance to half) (3) After making regular monthly payments for 10 years, how much will be the loan balance? Assume you obtain two quotes with and without (discount) points: either 7.2% APR without point or 6% with 2.5 points.

Q: You want to buy a house valued at $200,000.  AFter a down payment, you can finance the house with a…

A: The annual percentage rate is the rate earned on the investment or paid on loan over the period of…

Q: Suppose you are buying your first condo for $250,000, and you will make a $7,500 down payment. You…

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Q: You take out a 28-year mortgage loan for $757000. The annual interest rate of the loan that you pay…

A: Mortgage loan is a type of loan where a person puts his asset on Collateral to the lender to get a…

Q: You want to buy a $260,000 home. You plan to pay $26000 as a down payment, and take out a 30 year…

A: When a person does not have enough money to buy any assets, he would consider taking a loan. The…

Q: a) How much is the loan amount going to be? b) What will your monthly payments be? c) How much…

A: Loan payments can be paid off in periodic payments. To understand the periodic payments the loan…

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A: Mortgage/ Borrowings Borrowings are the loan which is taken by the individual to meet its financial…

Q: You want to buy a $191,000 home. You plan to pay 15% as a down payment, and take out a 30 year loan…

A: Cost of home = $191,000Down payment = 15%Loan terms = 30 yearsInterest rate = 7%

Q: You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over…

A: Monthly Loan Payment = PV*(r*(1+r)n)((1+r)n-1)  where: PV is the present value of the loan r is the…

Q: You want to buy a $228,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

A: Part (a) Given information, Home price = $228,000Down payment = 5% or 0.05 Calculate the loan amount…

Q: Suppose you take out a 25-year $100,000 mortgage with an APR of 6%. You make payments for 3 years…

A: When a loan's conditions, including its interest rate, payment schedule, or other terms, are…

Q: You want to buy a $240,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan…

A: Home value = $240,000 Down payment = $48,000 (i.e. $240,000 * 0.20) Monthly period (n) = 360 (i.e.…

Q: What is the payoff amount for the loan?

A: Present value illustrates the current value of a sum of money that will be received or paid in the…

Q: You are ready to buy a house, and you have $30,000 for a down payment and closing costs. Closing…

A: Mortgage loans are paid by equal and fixed monthly payment that carry the payment of interest and…

Q: ou want to buy a $224,000 home. You plan to pay 15% as a down payment, and take out a 20 year loan…

A: Monthly payments on an amortized loan refer to a fixed amount of money that a borrower pays each…

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A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: You want to buy a $255,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

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Q: You want to buy a $260,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

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A: The concept of time value of money will be used and applied here. When we take a loan or a mortgage…

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A: a.Loan ALoan Amount (pv) = $15,000Interest Rate (rate) = 5.9%Time Period = 3 YearsNumber of Payments…

Q: a $145,000 home. You found a bank that offers a 30-year loan at 3.5% APR. What will be your monthly…

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A: Loans are paid by the equal monthly payments that carry the payment for principal amount and also…

Q: You want to purchase a house valued at $200,000.  After a downpayment, you can finance the house…

A: Value of the house = $200,000 Number of years of mortgage = 20 Number of periods (n) = 20*12 = 240…

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A: A balloon payment is a significant, lump-sum amount due at the conclusion of a loan term, following…

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A:

Q: You need a 25-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend…

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Q: You want to buy a $189,000 home. You plan to pay 15% as a down payment, and take out a 30 year loan…

A: Home value = $189,000Down payment = 0.15 (15%)Monthly interest rate (r) = 0.003291666667 (0.0395 /…

Q: You want to buy a $230,500 home. You plan to pay 20% as a down payment, and take ou 5% for the rest.…

A: Honor code: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: You want to buy a $232,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan…

A: Here, Particulars Values Purchase price  $ 232,000.00 Down payment  10.00% Time period (in…

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A:

Q: You have an outstanding student loan with required payments of $500 per month for the next four…

A: given PMT = 500 r= 9/12 = 0.75% per monthn=12*4 = 48present value of the payment PV =…

Q: You want to buy a $243.000 home. You plan to pay 10% as a down payment, and take out a 30 year loan…

A: Monthly payment refers to an amount that is paid every month for the repayment of a loan amount…

Q: You want to borrow $77,000 from your local bank to buy a new sailboat. You can afford to make…

A: Compound = Monthly = 12Present Value = pv = $77,000Monthly Payment = p = $1300Time = t = 78

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.