Please show working You get a 15 year, 3.5% fixed-rate mortgage with one point, borrowing $300,000. a. what are your initial payments? b. what is the loan’s APR? c. suppose you prepay after 5 years, what is the outstanding loan balance? d. if you do prepay after 5 years, what is the effective annual rate?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
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Chapter22: Providing And Obtaining Credit
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Problem 2P: Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for...
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Please show working

You get a 15 year, 3.5% fixed-rate mortgage with one point, borrowing $300,000.

a. what are your initial payments?

b. what is the loan’s APR?

c. suppose you prepay after 5 years, what is the outstanding loan balance?

d. if you do prepay after 5 years, what is the effective annual rate?

 

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