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?

Q: Explain which is the better option.

A: Information Provided: House costs = $100,000 Down payment = $25,000 Option A = 3% APR for 20 years…

Q: You are planning to purchase a house that will require a mortgage of $300,000. You find 2 mortgage…

A: In order to calculate the monthly payment for both the type of mortgage PMT Excel function is used…

Q: You are planning to purchase a house that will require a mortgage of $400,000.  You find 2 mortgage…

A: Company needs to take loan for the financing of its assets. The loan could be taken in several…

Q: You are purchasing a house and you are considering getting a fixed-rate mortgage (FRM) for $750,000.…

A: Required monthly payments for the mortgage is calculated using excel PMT function Required monthly…

Q: You are eligible for a 30 year fixed rate home mortgage with an interest rate of 3.6% per year. If…

A: Here, Time Period of Loan (n) is 30 years Interest Rate of Loan (r) is 3.6% Monthly Payment (PMT) is…

Q: You plan to purchase a house for $166,000 using a 15-year mortgage obtained from your local bank.…

A: Discount points refer to the optional fees (extra charges) over the agreed stated interest rate on a…

Q: Use the following to solve questions a. and b. and please buid an excel spreadsheet and please show…

A: Both choices result in the same monthly payment.The total cost over 5 years would be the same, as…

Q: The price of a small cabin is $55,000. The bank requires a 5% down payment. The buyer is offered two…

A: Note: No intermediate rounding is done for calculation in the successive steps.   Cost of cabin is…

Q: You are looking to get a 30 year mortgage at 4%. You can afford $1,000 per month. a) What is the…

A: A mortgage is a type of loan used to purchase a property or real estate. The borrower (homebuyer)…

Q: You are borrowing $250,000 to buy a house, using a standard, 30-year mortgage. Your mortgage lender…

A: A mortgage is a covered loan taken out to purchase a property with the property itself acting as…

Q: You have decided to buy a house. You can get a mortgage rate of 5.15 percent, and you want your…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans,…

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

Q: You are considering a $75,000, 30-year mortgage to purchase a new home. The bank at which you have…

A: Mortgage payments are the regular monthly payments made to cover the amount borrowed as a loan…

Q: Answer the following questions  about your possible future home purchase by filling in  all…

A: As the house price is not given. Let us assume the house price is $350,000.

Q: Use the following to solve questions a. and b. with an excel spreadsheet and please show the…

A: Solving for Mortgage Payments with Excel FormulasHere's how you can solve this problem using an…

Q: You are considering buying a house. The home is currently listed for $750,000. Terms for the loan…

A: To calculate the monthly mortgage payment, use the formula for a fixed-rate mortgage:Where:M =…

Q: You want to purchase a house and are reviewing variations in how to structure the mortgage. One of…

A: Note: Replace "PMT" in the formulas with the actual PMT() calculations from Excel.Once these…

Q: You are considering buying a house.  The home is currentlylisted for $750,000.  Terms for the loan…

A: The following is the excel formula used for the calculation:

Q: your bank in which you will pay 3 points on a $300,000 mortgage.  What is the dollar amount you will…

A: In mortgage there are points to be paid which reduce the yield on the loans.

Q: TOTAL INTEREST PAID. You are considering purchasing a home that requires $450,000 mortgage at 5.25%.…

A: Solution:- When an amount is borrowed, it can either be repaid as lump sum payment or in…

Q: You are going to buy a house and borrow $542474 with a 30-year mortgage.  Your interest rate is…

A: The future value concept is widely used in finance and economics, including in the areas of…

Q: 360 days To complete the sale of a house, the you accept a 240-day note for $9,000 at 7% simple…

A: Note for 240 days  Value of Note = $9,000 Interest rate = 7% Third party note = $9,108 Time period…

Q: The McDaniel family is purchasing a home, and their mortgage. The home costs $156,000 and they have…

A: First we need to use loanbsp;loan amotorization formula below to calculate monthly payment.  where…

Q: You obtain a 30-year home mortgage and your monthly payment is $3000.00. Instead of paying monthly…

A: Time period for mortgage is 30 years Case -1:Monthly payment of $3000 Case -2: Yearly  payment of…

Q: You purchase a home for $434,000 by making a down payment of 15% and financing the remaining amount…

A: A mortgage refers to a covered loan that is borrowed for the purchase of a property, which itself…

Q: You have been shopping for a new home. You have the choice of financing for your $300,000. You can…

A: Principle amount is $300,000 We have two Choices:- 1st Choice:- Rate of interest is 4.5% Loan…

Q: You plan to purchase a $240,000 house using a 30-year mortgage obtained from your local credit…

A: A mortgage is a loan borrowed for property purchase which is covered by the property itself. It is…

Q: 1. you want to buy a $250,000 house and you will use a conventional mortgage. What is the minimum…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: You are about to take a mortgage and you plan to hold it for 10 years. A lender offers you a 30-year…

A: Option (i)Period (n)= 30 years = 30 X 12 = 360 monthsPrincipal of loan (P) = $ 250,000Contract rate…

Q: ay you need to take out a loan for $1,500. There are two options for repayment: Option A:…

A: Amortized loans refer to equal payments containing  both principal and interest; in which, first of…

Q: Suppose you are buying your first home for $144,000, and you have $17,000 for your down payment. You…

A: purchasing price = $144,000 down payment = $17,000 loan amount = $144,000 - 17,000…

Q: You want to take a $172260 mortgage at j2 = 11.59 % and can afford topay up to $5030 per quartely.…

A: Quarterly Payment = $5030 Amount of Mortgage = $172260 Interest Rate per annum = 11.59% Interest…

Q: A. Calculate the total amount paid for Mortgage A. B. Calculate the total interest paid for Mortgage…

A: Loan re-payments are done through periodic fixed amounts or sums. The periodic payments include both…

Q: nt a.)If his new home costs $136,000, what is his down payment? b.)How much is he going to borrow…

A: PMT function computes installment amount for given interest rate (RATE), no. of installments (NPER)…

Q: ou have agreed to loan some money to a friend at a simple interest rate of 62% your friend needs a…

A: Rate = 62% Principal = $1470 Maturity Value =$3200 Interest = $3200 -$1470 Interest = $1730

Loans

A loan is a term that we are all familiar with. The processing of loans is one of the most important functions of a bank. It keeps our economy stable and facilitates the implementation of monetary policies. Let's take a look at the different forms of loans and get some answers to some common questions.