1. Mandy has a 30-year adjustable rate mortgage with a rate of 4.8% for the first 2 years. The monthly payment is $813.23. The amount of the mortgage is $155,000. What is the remaining balance after 2 years rounded to the nearest dollar? A. $150,143 B. $135,482 C. $144,667 D. $141,926 2. The bank offers Mitchell a fixed rate loan with no points and a fixed rate loan with points. The difference in monthly payments between the loan with points and the loan without points is $27.31. The cost of the points is $1,800. What number is closest to the break-even point rounded to the nearest month? A. 78 months B. 66 months C. 5 months D. 18 months 3. How are a 25-year 4% fixed rate mortgage and a 25-year 4% adjustable rate mortgage with terms 3/1 and a cap of 2/7 the same? How are they different?

1. Mandy has a 30-year adjustable rate mortgage with a rate of 4.8% for the first 2 years. The monthly payment is $813.23. The amount of the mortgage is $155,000. What is the remaining balance after 2 years rounded to the nearest dollar? A. $150,143 B. $135,482 C. $144,667 D. $141,926 2. The bank offers Mitchell a fixed rate loan with no points and a fixed rate loan with points. The difference in monthly payments between the loan with points and the loan without points is $27.31. The cost of the points is $1,800. What number is closest to the break-even point rounded to the nearest month? A. 78 months B. 66 months C. 5 months D. 18 months 3. How are a 25-year 4% fixed rate mortgage and a 25-year 4% adjustable rate mortgage with terms 3/1 and a cap of 2/7 the same? How are they different?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 24PROB

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