Over the past 40 years, interest rates have varied widely. The rate for a 30-year mortgage reached a high of 14.75% in July 1984, and it reached 3.31% in November 2012. A significantimpact of lower interest rates on society is that they enable more people to afford the purchase of a home. In the following exercise, we consider the purchase of a home that sells for$125,000. Assume that we can make a down payment of $25,000, so we need to borrow $100,000. We assume that our annual income is $43,000 and that we have no other debtCan we afford the home?Ⓒ YesNoIf we can afford to pay a monthly amount of $753.33, determine how much we can borrow if the term is 30 years and the interest rate is at the historic high of 14.75% (Round youranswer to the nearest dollar)If we can afford to pay a monthly amount of $753.33, determine how much we can borrow If the term is 30 years and the interest rate is 3.31% [Round your answer to the nearestdollar)Can we afford the home now?OYS204NoHow much more can you afford to borrow when the 30-year mortgage rate is at 3:31% compared to 14.7357

Given: Particulars Interest rate high 14.75% Interest rate low 3.31% Cost of house…

Over the past 40 years, interest rates have varied widely. The rate for a 30-year mortgage reached a high of 14.75% in July 1904, and it reached 3.31% in November 2012. A significant impact of lower interest rates on society is that they enable more people to afford the purchase of a home. In the following exercise, we consider the purchase of a home that sells for $125,000. Assume that we can make a down payment of $25,000, so we need to borrow $100,000. We assume that our annual income is $43,000 and that we have ne sither debr If we can afford to pay a monthly amount of $753.33, determine how much we can borrow if the term is 30 years and the interest rate is at the historic high of 14.75% (Round your answer to the nearest dollar) $ Can we afford the home? Yes No If we can afford to pay a monthly amount of $753.33, determine how much we can borrow If the term is 30 years and the interest rate is 3.31%. (Round your answer to the nearest dollar) S Can we afford the home now? OY No How much more can you afford to borrow when the 30-year mortgage rate is at 3.31% compared to 14.7363

Over the past 40 years, interest rates have varied widely. The rate for a 30-year mortgage reached a high of 14.75% in July 1904, and it reached 3.31% in November 2012. A significant impact of lower interest rates on society is that they enable more people to afford the purchase of a home. In the following exercise, we consider the purchase of a home that sells for $125,000. Assume that we can make a down payment of $25,000, so we need to borrow $100,000. We assume that our annual income is $43,000 and that we have ne sither debr If we can afford to pay a monthly amount of $753.33, determine how much we can borrow if the term is 30 years and the interest rate is at the historic high of 14.75% (Round your answer to the nearest dollar) $ Can we afford the home? Yes No If we can afford to pay a monthly amount of $753.33, determine how much we can borrow If the term is 30 years and the interest rate is 3.31%. (Round your answer to the nearest dollar) S Can we afford the home now? OY No How much more can you afford to borrow when the 30-year mortgage rate is at 3.31% compared to 14.7363

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

6) Over the past 40 years, interest rates have varied widely. The rate for a 30-year mortgage reached a high of 14.75% in July 1984, and it reached 3.31% in November 2012. A significant impact of lower interest rates on society is that they enable more people to afford the purchase of a home. In the following exercise, we consider the purchase of a home that sells for $125,000. Assume that we can make a down payment of $25,000, so we need to borrow $100,000. We assume that our annual income is $35,000 and that we have no other debt. If we can afford to pay a monthly amount of $566.67, determine how much we can borrow if the term is 30 years and the interest rate is at the historic high of 14.75%. (Round your answer to the nearest dollar.) $ Can we afford the home? Yes No If we can afford to pay a monthly amount of $566.67, determine how much we can borrow if the term is 30 years and the interest rate is 3.31%. (Round your answer to the nearest dollar.) $ Can we afford the home now? Yes…
Last year, Lee Industries decided to restructure some of its debt by paying off one of its short-term loans. To do so, the company borrowed the money one year ago at an interest rate of 10% per year. If the total cost of repaying the loan was $53 million, what was the amount of the original loan?
Suppose you decide to wait 5 years to save up before buying the house. You are able to put a down payment of $30,000 on the house, so that you only need to borrow $170,000 from the bank. Assume the interest rate is still the same, but you are now in a better financial position, and you can pay off the loan in 240 equal monthly payments. Answer the following questions about this loan. After making 240 monthly payments, how much of what you paid the bank was interest? $ . ROUND TO THE NEAREST CENT. THANKS APPRECIATE THE HELP!!!
Suppose that 10 years ago you bought a home for $170,000, paying 10% as a down payment, and financing the rest at 7% interest for 30 years. How much money was your existing mortgage (loan) for?
How much money was your existing mortgage loan for? suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 9% interest for 30 years.
New Venture Corporation has taken out a $5 million, 30-year, 10% mortgage on its new manufacturing facility. How much will New Venture pay each month to discharge this mortgage? How much of the first payment is for interest, and by how much does it reduce the balance owed ? How much of the second payment is for interest, and by how much does it reduce the balance owed ?
You just bought a $900,000 house in Philly. You financed your purchase with a loan. Assume that houses in Inland Empire increase at the rate of 5.30 percent a year. Your downpayment rate at the time of house purchase was 40 percent. (a) The expected appreciation rate on home price next year equals ______ percent. (Round to two decimal places. (b) The expected rate of appreciation on your home equity next year equals # ____% (c) TRUE OR FALSE? The lower the loan-to-value ratio, the higher the rate of appreciation on your home equity next year. This statement is _____
New Venture Corporation has taken out a $ 5 million , 30-years, 10 percent mortgage on its new manufacturing facility. How much will New Venture pay each month to discharge his mortgage ? How much of the first payment is for interest, and by how much does it reduce the balance owed ? How much of the second payment is for interest, and by how much does it reduce the balance owed ?please doing these math full details and correctly help
Suppose that you took out a mortgage loan and should repay $500 per month in the next 20 years. In this circumstance, would you be happy if the central bank decides to raise the interest rate?
Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.Your existing mortgage (the one you got 10 years ago) This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000. Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate.If you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your new monthly payments be?
Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.Your existing mortgage (the one you got 10 years ago) This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000. Analyzing the refinanceNotice that if you refinance, you are going to be making payments on your home for another 30 years. In addition to the 10 years you've already been paying, that's 40 years total.How much will you save each month because of the lower monthly payment?
Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years.Your existing mortgage (the one you got 10 years ago) This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $118,428 left to pay on your loan. Your house is now valued at $210,000. How much equity do you have in your home? (equity is value minus remaining debt)

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS