Please do not give image formatAnd do not use chat gpt answer A 30-year fully amortizing mortgageloan was made 10 years ago for$89,000 at 6 percent interest. Theborrower would like to prepay themortgage balance by $12,800.Required: a. Assuming he can reducehis monthly mortgage payments, whatis the new mortgage payment?b. Assuming the loan maturity isshortened and using the originalmonthly payments, what is the newloan maturity?

Here,Loan Amount is $89,000Interest Rate is 6%Time Period of Loan is 30 yearsPrepayment Amount is…

Answered: A 30-year fully amortizing mortgage…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of 50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year b. A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year c. An 8.75% annual rate on a discounted loan, with a 15% compensating balance d. Interest figured as 8% of the 50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year
Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?
Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each year?
Using the information provided, what transaction represents the best application of the present value of an annuity due of $1? A. Falcon Products leases an office building for 8 years with annual lease payments of $100,000 to be made at the beginning of each year. B. Compass, Inc., signs a note of $32,000, which requires the company to pay back the principal plus interest in four years. C. Bahwat Company plans to deposit a lump sum of $100.000 for the construction of a solar farm In 4 years. D. NYC Industries leases a car for 4 yearly annual lease payments of $12,000, where payments are made at the end of each year.
Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?
A 30-year fully amortizing mortgage loan was made 10 years ago for $90,000 at 6 percent interest. The borrower would like to prepay the mortgage balance by $13,000. Required: a. Assuming he can reduce his monthly mortgage payments, what is the new mortgage payment? b. Assuming the loan maturity is shortened and using the original monthly payments, what is the new loan maturity?
A partially amortizing mortgage is made for $62,000 for a term of 10 years. The borrower and lender agree that a balance of $20,400 will remain and be repaid as a lump sum at that time. Required: a. If the interest rate is 7 percent, what must monthly payments be over the 10-year period? b. If the borrower chooses to repay the loan after five years instead of at the end of year 10, what must the loan balance be? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
A partially amortizing mortgage is made for $75,000 for a term of 10 years. The borrower and lender agree that a balance of $23,000 will remain and be repaid as a lump sum at that time.Required: a. If the interest rate is 7 percent, what must monthly payments be over the 10-year period? b. If the borrower chooses to repay the loan after five years instead of at the end of year 10, what must the loan balance be
An interest-only mortgage is made for $94,000 at 6 percent interest for 10 years. The lender and borrower agree that monthly payments will be constant and will require no loan amortization. Required: a. What will the monthly payments be? b. What will be the loan balance after five years? c. If the loan is repaid after five years, what will be the yield to the lender? d. Instead of being repaid after five years, what will be the yield if the loan is repaid after 10 years?
NEED FULLY CORRECT HANDWRITTEN SOLUTION FOR THIS...ASAP!!! A $180,000 mortgage amortized by monthly payments over 20 years is renewable after five years. (a) If interest is 5.02% compounded semi-annually, what is the size of each monthly payment? (b) Find the total interest paid during the first year. (c) Compute the interest included in the 35th payment. (d) If the mortgage is renewed after five years at 5.80% compounded semi-annually, what is the size of the monthly payment for the renewal period? (e) Construct a partial amortization schedule showing details of the first three payments for each of the two terms.
Consider the following. Two mortgages are available for $500,000.00. Both are paid monthly, compounded quarterly have terms of 5 years and are amortized over 25 years. One has an interest rate of 3% however prohibits any prepayment, the other has an interest rate of 3.1% and allows for prepayment of 10% of the balance per year. If the borrower expects to make a lump sum payment at the end of each year of $400.00 which mortgage costs the least interest by the end of the term?
A partially amortizing mortgage is made for $50,000 for a term of 10 years. The borrower and lender agree that a balance of 20,000 will remain and be repaid as a lump sum at that time. 1- If the interest rate is 7 percent. what must monthly payments be over the 10-year period 2- the borrower chooses to repay loan after 5 years instead of at the end of year 10, what must the loan balance be:

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