The link to the home I will be using is http://www.zillow.com/homes/for_sale/41830186_zpid/4-_beds/36.737371,-87.192822,36.501771,-87.561893_rect/11_zm/6_sch/.
This home is $20,000.00 to be financed at 80% of the purchase price. The purchase price is $20,000.00 and 6the interest rate is at 5%
To find the interest rate
20,000 x 5%= 20,000x0.05= $1,000.
The Formula is monthly mortgage= amount financed x table value
$100
Determining the payment if we had a 15 year mortgage we would again use the formula monthly mortgage= amount financed x table value $1000
To find the table value, we will use the table in the book and look for 5% Annual interest and 15 years. Which is 15.82.
Monthly mortgage = 1000 x 15.92 100
1000
100= 10 x 15.92= $150.92
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To calculate the PITI payment:
1) Establish the principal and interest amount of the monthly payment. Using the 30 year loan principal and interest amount of the payment is $1,150.92
2) The monthly taxes are determined by considering the purchase price of $20,000 x 5% = $1000 yearly. Divide $1000 by 12 (the number of months in a year.) to find monthly taxes. 1000/12= 83.33, which is the monthly taxes.
3) The sum of the monthly principal, interest, and taxes
1150.92+83.33+100.00=
would be $200. She wants to make sure that she can afford this monthly loan payment, so she is creating an
Let us start off by calculating the interest earned over the four years of the mortgage:
* If the price was set at $90,000 the new fixed cost percent would be 23% as that is the closest to $90,000 at $89,997
According to the calculation above, assuming that the present value is 100, S&P 500 will have higher return on the triple- leveraged ETF than the unlevered ETF. This shows us that although sometimes the triple-leveraged ETF would be more risky on loss but it can still earn more.
8. If you want to purchase a home. You have $15,000 to put down. All you can afford is $1,500.00 per month and you do not want to finance for more than 15 years @ 6% interest, (your taxes will be $85.00 per month and insurance $200.00 a month), what is the amount you can pay for your home? (Show all your work)
At an interest rate of 15% per year (3.75% for three months, the amount to borrow equals
Mortgage I 30 year fixed rate @ 7.58%/yr/mo, monthly payments, minimum 5% down payment, 1 point closing costs Mortgage II 15 year fixed rate @ 7.13%/yr/mo, monthly payments, minimum 5% down payment, 1 point closing costs Mortgage III 30 year fixed rate @ 7.08%/yr/2-weeks, bi-weekly payments, minimum 5% down payment, 1 point closing costs Mortgage IV 15 year fixed rate @ 6.63%/yr/2-weeks, bi-weekly payments, minimum 5% down payment, 1 point closing costs
Given the warnings of the housing market softening, it would be safe to assume a 4% growth rate. Finally, tax savings are calculated based on deductions from mortgage interest payments and property taxes multiplied by the Lintons’ marginal tax rate of 33%.
Average lot price $50,000. Discount Rate 10%. Other parameters as shown above. Determine the Present Value of the Cash Flows, and the Present Value per Lot.
IPmt(0.0525/1, 4, 10*1, 6500) MS Excel: PPMT Function (WS, VBA) • In Excel, the PPMT function returns the payment on the principal for a particular payment based on an interest rate and a constant payment schedule. • The syntax for the PPMT function is: • PPMT( interest_rate, period, number_payments, PV, [FV], [Type] ) • interest_rate is the interest rate for the loan. • period is the period used to determine how much principal has been repaid. Period must be a value between 1 and number_payments.
% i=8% 1 2 3 4 5 6 7 8 9 0.980 1.942 2.884 3.808 4.713 5.601 6.472 7.326 8.162 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 i=10% i=10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 4-21 PV of Your Bank Loan Cynthia Smart agrees to repay her PMT loan in 24 monthly PVImm. {1 - (1 r)-n } r installments of $250 each. If the interest rate on the loan is $250 0.75% per month PVImm = {1 - (1 + 0.0075)-24 } 0.0075 (9% per annum), what is the present =$5,472.29 value of her loan payments?
With a discount rate of 4.4%, the present values of the rental payments for the years 2006 and 2007 are as follows:
Since $4207.969 is the monthly payment, therefore another calculation of the yearly payment is necessary for the preparation of the amortisation table.
1312.5 (1.00625)60/ (1.00625) 60-1 = 1907.45 / 0.45 = 4207.97 B. Amortisation Table Amount Borrowed 210000 Periods 60 Rate 0.00625 Payment $4,207.97 Months Beginning
Note – The book “Financial management” suggests the balance amount of loan one owes must be equal to the present value of the remaining loan payment (Titman et all, 2014). The information regarding the calculation of loan and outstanding loan gave us a fair idea about how the loan financing occur. Another important aspect learned is how the principle and interest affect the amount of any loan. This knowledge also brought other factors into consideration such as refinancing mortgage loan cost. The refinancing cost involves distinct hidden costs such as appraisal fee, legal fee, origination fee, and application. Hence, if one plan to refinance the loan by getting attracted to lower interest rate. The refinance must put some extra money aside to pay the refinancing cost.