esCNBC.com reported mortgage applications increased 9.9% due to a decrease in the rate on 30-year fixed-rate mortgages. JoeSisneros wants to purchase a vacation home for $235,000 with 20% down. Calculate his monthly payment for a 20-year mortgage33%. Calculate total interest. (Use Table 15.1.)Note: Round your intermediate calculations and final answer to the nearest cent.Monthly paymentTotal interest$ 1,078.29

The mortgage means the amount that is borrower to purchase house or flat. The mortgage is a written…

Answered: CNBC.com reported mortgage applications…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 3P: Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of...

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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?
Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
A homeowner just obtained a 30-year (360-month) mortgage for $120,000. The mortgage has a fixed nominal annual rate of 8%, with monthly payments. What percentage of the total payments made during the first 3 months will go toward payment of interest?
Tim Huston purchased a wall unit for $2,200. He made a $600.00 down payment and financed the balance with an installment loan for 48 months. If Tim’s payments are $42.59 per month, use the APR formula to calculate what annual percentage rate he is paying on the loan. (Round your answer to two decimal places)
A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow $30,000, the interest for the year will be $5,100. Because you must repay a total of $35,100 in one year, the finance company requires you to pay $35,100/12, or $2,925.00, per month over the next 12 months. a. What rate would legally have to be quoted? b. What is the effective annual rate?
Flat Rock Inc recently borrowed $55,000 from its bank at a simple interest rate of 9.2%. The loan is for one year and the loan agreement calls for the interest to be added to the amount borrowed and the total amount ot be repaid in monthly installments. (a) what are the loans monthly payments? (b) compute th loans APR and rEAR.
On January 1, the home mortgage balance was $293, 000 for the home owned by Tom Thomas. The interest rate for the loan is 7.125 percent. Assuming that Tom makes the January monthly mortgage payment of $3516, calculate the following: (a) The amount of interest included in the January payment (round your answer to the nearest cent). (b) The amount of the monthly mortgage payment that will be used to reduce the principal balance. (c) The new balance after Tom makes this monthly mortgage payment.
A borrower received a 30-year ARM mortgage loan for $200,000. Rate caps are 3/2/6. The start rate is 3.50% and the loan adjusts every 12 months for the life of the mortgage. The index used for this mortgage is MTA (for this exercise, 3.00% at the start of the loan, 4.45% at the end of the first year, and 4.50% at the end of the second year). The margin on the loan is 3.00%, which remains the same for the duration of the loan. 1. What is the initial rate (start rate) the borrower will pay during the first year? 2. What is the interest rate the borrower will pay after the first rate adjustment? (Hint: Remember to use the “stair step method” for determining the new interest rate.) 3. What is the fully indexed rate after the second year? 4. What is the maximum interest rate the borrower will pay during the 30-year term for this loan? 5. If the interest rate is at its maximum, what would the MTA index have to be to reach the maximum interest rate?
A borrower received a 30-year ARM mortgage loan for $200,000. Rate caps are 3/2/6. The start rate is 3.50% and the loan adjusts every 12 months for the life of the mortgage. The index used for this mortgage is MTA (for this exercise, 3.00% at the start of the loan, 4.45% at the end of the first year, and 4.50% at the end of the second year). The margin on the loan is 3.00%, which remains the same for the duration of the loan. What is the initial rate (start rate) the borrower will pay during the first year? What is the interest rate the borrower will pay after the first rate adjustment? (Hint: Remember to use the “stair step method” for determining the new interest rate.) What is the fully indexed rate after the second year? What is the maximum interest rate the borrower will pay during the 30-year term for this loan? If the interest rate is at its maximum, what would the MTA index have to be to reach the maximum interest rate? Instructions: Select Start Draft. Enter your…
Suppose you obtain a 30 year mortgage loan of $193,000 at an annual interest rate of 7.8%. The annual property tax bill is $978 and tha annual fire insurance premium is $491. Find the total monthly payment for the mortgage, property tax, and fire insurance. (Round your answer to the nearest cent)
Suppose you obtain a 25- year mortgage loan of 191,000$ at an annual interest rate of 7.9%. The annual property tax bill is $974 and the annual fire insurance premium is 488$. Find the total monthly payment for the mortgage, property tax, and fire insurance. (Round your answer to the nearest cent.)
On April 1, the home mortgage balance was $226, 000 for the home owned by Susan Thomas. Theinterest rate for the loan is 8 percent. Assuming that Susan makes the April monthly mortgage payment of $1808, calculate the following: (a) The amount of interest included in the April payment (round your answer to the nearest cent). (b) The amount of the monthly mortgage payment that will be used to reduce the principal balance. (C) The new balance after Susan makes this monthly mortgage payment. (a)| Interest amount: $ (b) Principal reduction: $ (c) New balance: $

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