You purchase a house for $1m. You put a 20% down payment and take out a mortgage on the remainder. Your mortgage agreement specifies a rate of 8% APR compounded weekly. You will make semi-monthly (twice-a-month) payments for 25 years. At the end of one year of payments (on the first anniversary of your mortgage) you make a one-time additional lump-sum payment of $20,000 toward the mortgage. One year after that (so on the second anniversary of your mortgage), you decide to pay off the remaining mortgage balance outstanding. The penalty charge for paying off the mortgage in advance is 3 months of simple monthly interest on the balance due. The balance owing, including the penalty, is within $100 of which of the following? Note: I am following our course conventions: a) factors other than (F/P.) and (P/F.) are correct to four decimal places b) interest rates are correct to four positive decimal places (four significant digits). c) use the equations, do not round, for the (F/P.) and (P/F.) factors 761,845 762,045 762,245 762,445 762,645
You purchase a house for $1m. You put a 20% down payment and take out a mortgage on the remainder. Your mortgage agreement specifies a rate of 8% APR compounded weekly. You will make semi-monthly (twice-a-month) payments for 25 years. At the end of one year of payments (on the first anniversary of your mortgage) you make a one-time additional lump-sum payment of $20,000 toward the mortgage. One year after that (so on the second anniversary of your mortgage), you decide to pay off the remaining mortgage balance outstanding. The penalty charge for paying off the mortgage in advance is 3 months of simple monthly interest on the balance due. The balance owing, including the penalty, is within $100 of which of the following? Note: I am following our course conventions: a) factors other than (F/P.) and (P/F.) are correct to four decimal places b) interest rates are correct to four positive decimal places (four significant digits). c) use the equations, do not round, for the (F/P.) and (P/F.) factors 761,845 762,045 762,245 762,445 762,645
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 purchase a house for $1m. You put a 20% down payment and take out a
mortgage on the remainder. Your mortgage agreement specifies a rate of 8% APR
compounded weekly. You will make semi-monthly (twice-a-month) payments for 25
years. At the end of one year of payments (on the first anniversary of your mortgage)
you make a one-time additional lump-sum payment of $20,000 toward the
mortgage. One year after that (so on the second anniversary of your mortgage), you
decide to pay off the remaining mortgage balance outstanding. The penalty charge
for paying off the mortgage in advance is 3 months of simple monthly interest on the
balance due. The balance owing, including the penalty, is within $100 of which of the
following? Note: I am following our course conventions:
a) factors other than (F/P.) and (P/F.) are correct to four decimal places
b) interest rates are correct to four positive decimal places (four significant digits).
c) use the equations, do not round, for the (F/P.) and (P/F.) factors
761,845
762,045
762,245
762,445
762,645
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