Math Class 2 (Homework)

MATH CLASS 2- HOMEWORK www.GOBCrealestate.com MATH 2- HOMEWORK GOBC Real Estate • Mortgage Notes • PAYMENT • N • OUTSTANDING BALANCE • PRINCIPAL REDUCTION

MATH CLASS 2- HOMEWORK PAYMENT_______________________________________________________________________ 16. A $70,000 mortgage loan, written at a nominal rate of 17% per annum, compounded annually, has a two-year contractual term. Payments are made monthly and are based on a 20-year amortization period. Payments are rounded to the next higher dollar. What is the size of the required payments ? (1) $ 975.00 (2) $ 997.00 (3) $ 1,027.00 (4) $ 964.00 17. Ally has recently received an interest only loan for $75,000 to operate a food cart in downtown Vancouver. The loan has an interest rate of 6% per annum, compounded monthly, and requires interest only payments every month. How much are the monthly interest only payments that Ally makes if the duration of the loan is two years? (1) $750 (2) $500 (3) $375 (4) $1,000 18. Calculate the monthly payment required for the following mortgage: Principal of $40,000; 14% per annum, compounded semi-annually; amortization period of 20 years. (1) $486.47 (2) $486.08 (3) $469.56 (4) $497.41 19. Brad has recently received an interest only loan for $100,000 to operate a food cart in downtown Vancouver. The loan has an interest rate of 8% per annum, compounded monthly, and requires interest only payments every month. How much are the monthly interest only payments that Brad makes if the duration of the loan is two years? (1) $1,333.33 (2) $666.67 (3) $500.33 (4) $1,200.67 Homework for MATH 2: 1). Solve Payment questions pages 24-25 2). Solve N questions pages 26 3). Solve Outstanding (OSB) and Principal Reductions (PR) Questions pages 27-28 4). Watch the videos for the next class (Math class 3) Answers: 16(4), 17(3), 18(2), 19(2) 24 0

©2021 GOBC Training LTD 20. As one lowers a discount (or expected yield) rate, the present value of a given series of future payments: (1) decreases. (2) could go up or down depending on the timing of the payments. (3) increases. (4) remains constant. 21. Sam and Sally recently negotiated a second mortgage in the amount of $24,000 at an interest rate of 19% per annum, compounded semi-annually. The loan is to be amortized over twenty years by equal quarterly payments. What is the size of the quarterly payment to be made by Sam and Sally? (1) $1,114.17 (2) $369.74 (3) $1,144.49 (4) $388.97 22. A $70,000 mortgage loan, written at a nominal rate of 17% per annum, compounded semi-annually, has a two year contractual term. Payments are made monthly and are based on a 20 year amortization period. Payments are rounded to the next higher dollar. What is the size of the required payments? (1) $ 975.00 (2) $ 997.00 (3) $ 1,027.00 (4) $ 983.00 23. A vendor is willing to sell his house for $96,000. He demands 24 monthly payments, and payment of the outstanding balance in the amount of $75,000 with the 24th payment. He wishes to earn an effective annual rate of 15% on his money. What is the monthly payment required? (1) $1,159.87 (2) $1,923.24 (3) $1,599.23 (4) $1,887.47 24. A borrower has arranged a loan of $196,000 at an interest rate of 6% per annum, compounded annually over an amortization period of 15 years. What is the monthly payment required? (1) $1,386.30 (2) $1,543.86 (3) $1,262.84 (4) $1,637.18 25. A $1,410,000 construction loan is written at 21 1/2% per annum, compounded semi-annually and requires interest only payments monthly. The amount of those payments is: (1) $24,082.24 (2) $24,028.42 (3) $23,492.17 (4) $24,200.06 26. A $195,000 mortgage loan was written one year ago at 17 3/4% per annum, compounded monthly. At the end of its 5-year term, the borrower will owe $191,591.33 on the loan. What is the amount of each monthly payment, rounded to the next higher cent? (1) $2,719.06 (2) $4,925.24 (3) $2,920.05 (4) $2,933.65 Answers: 20(3), 21(3), 22(2), 23(4), 24(4), 25(4), 26(3) 25 0