a. What should SMPC pay if it wants an 11 percent return? b. What is the balance of the original loan after five additional years (10 years from origination)?
a. What should SMPC pay if it wants an 11 percent return? b. What is the balance of the original loan after five additional years (10 years from origination)?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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Secondary Mortgage Purchasing Company (SMPC) wants to buy your mortgage from the local savings and loan. The original balance of your mortgage was $158,000 and was obtained five years ago with monthly payments at 10 percent interest. The loan was to be fully amortized over 30 years.
Required:
a. What should SMPC pay if it wants an 11 percent return?
b. What is the balance of the original loan after five additional years (10 years from origination)?
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