Use PMT formula to determine the regular payment amount, rounded to the nearest dollar. Consider the following pair of mortgage loan options for a $165,000 mortgage. Which mortgage loan has the larger total cost (closing costs + the amount paid for points + total cost of interest)? By how much? Mortgage A: 15-year fixed at 6.25% with closing costs of $1800 and 1 point. Mortgage B: 15-year fixed at 5.25% with closing costs of $1800 and 2 points. Choose the correct answer below, and fill in the answer box to complete your choice. (Do not round until the final answer. Then round to the nearest dollar as needed.) B. Mortgage A has a larger total cost than mortgage B by $_________.

Use PMT formula to determine the regular payment amount, rounded to the nearest dollar. Consider the following pair of mortgage loan options for a $165,000 mortgage. Which mortgage loan has the larger total cost (closing costs + the amount paid for points + total cost of interest)? By how much? Mortgage A: 15-year fixed at 6.25% with closing costs of $1800 and 1 point. Mortgage B: 15-year fixed at 5.25% with closing costs of $1800 and 2 points. Choose the correct answer below, and fill in the answer box to complete your choice. (Do not round until the final answer. Then round to the nearest dollar as needed.) B. Mortgage A has a larger total cost than mortgage B by $_________.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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Use PMT formula to determine the regular payment amount, rounded to the nearest dollar. Consider the following pair of mortgage loan options for a $165,000 mortgage. Which mortgage loan has the larger total cost (closing costs + the amount paid for points + total cost of interest)? By how much? Mortgage A: 15-year fixed at 6.25% with closing costs of $1800 and Mortgage B: 15-year fixed at 5.25% with closing costs of $1800 and Choose the correct answer below, and fill in the answer box to complete your choice. (Do not round until the final answer. Then round to the nearest dollar as needed.) A. Mortgage B has a larger total cost than mortgage A by $_________. B. Mortgage A has a larger total cost than mortgage B by $_________.
In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $42,000 and the interest rate is 8.50%, the borrower “pays” 0.0850 × $42,000 = $3,570 immediately, thereby receiving net funds of $38,430 and repaying $42,000 in a year. a. What is the effective interest rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the effective annual rate on a 1-year loan with an interest rate quoted on a discount basis of 18.50%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
For a $100,000 mortgage for 25 years at a 11.5% rate (monthly payments), find 4) If 8.685 points are charged, what is the dollar amount actually loaned? 5) if the loan is held for 25 years, what is the yield to the lender? - hint - subtract 8.685% from the $100,000 loan amount and enter as negative PV, then enter the monthly payment amount as pmt, enter 300 as n, and solve for %I (and multiply the answer by 12 to get the annual rate).
Use the following amortization chart: Selling priceof home Downpayment Principal(loan) Rate of interest Years Payment per$1,000 Monthly mortgage payment $ 95,000 $ 6,000 $ 89,000 6% 30 $ 6.00 $ 534.00 Assume the interest rate rises to 7.5%. What is the total cost of interest with the new interest rate? (Use Table 15.1.) (Do not round intermediate calculations. Round your final answer to the nearest cent.) Total Cost of Interest
Please show step by step and formulas to solve and answer A. and B. You borrow a Graduated Payment Mortgage (GPM) of $400,000 with monthly payments and 15-year term. The annual interest rate is 4%. The lender allows you to pay only 0.5 monthly PMT for the first 5 years and pay full monthly PMT thereafter. In other words, your payment factors are as follows: month 1-month 60: 50%; and month 61- month 180: 100%. Suppose that the origination cost of the loan is $5,000, please answer the following questions: A. What is your monthly payment for the first 5 years? B. What is your annual effective cost of the GPM if you hold the loan for an entire term?
Need Detailed answer with steps please 30. Considering the following information, what is the NPV if the borrower refinances the loan? Expected holding period: 3 years, Current loan balance: $100,000; Current loan interest: 7%; Current loan mortgage payment: $898.33; Remaining term on current mortgage: 15 years; New loan interest: 5.5%; New loan mortgage payment: $817.08; New loan term: 15 years; Cost of refinancing: $5,000. Assume that the opportunity cost is the interest rate on the new loan (5.5%). A. -$5,000.00 B. -$1,155.27 C. $3,844.73 D. $8,844.73
In Excel Please show how to solve this and please show step by step how to solve to answer questions A. and B. . You borrow a Graduated Payment Mortgage (GPM) of $400,000 with monthly payments and 15-year term. The annual interest rate is 4%. The lender allows you to pay only 0.5 monthly PMT for the first 5 years and pay full monthly PMT thereafter. In other words, your payment factors are as follows: month 1-month 60: 50%; and month 61- month 180: 100%. Suppose that the origination cost of the loan is $5,000, please answer the following questions: A. What is your monthly payment for the first 5 years? B. What is your annual effective cost of the GPM if you hold the loan for an entire term?
Use the following amortization chart: Selling price of home Down payment Principal (loan) Rate of interest Years Payment per $1,000 Monthly mortgage payment $ 79,000 $ 6,000 $ 73,000 6% 30 $ 5.9955 $ 437.67 Assume the interest rate rises to 7.5%. What is the total cost of interest with the new interest rate? (Use Table 15.1). Note: Round your intermediate calculations and final answer to the nearest cent. Total cost of interest:???
Please show all steps and formulas in an excel spreadsheet to answer a. through g. using the information below! You bought a house with price of $250,000. Your LTV (loan-to-value ratio) is 80%. You choose the 30-year mortgage with interest rate 6%. Assuming the total transaction cost is $10,000. a. What is your loan amount? b. What is your monthly payment? c. What will be the loan balance at the end of nine years? d. What is the effective borrowing cost if the loan will be prepaid at the end of nine years? e. In the monthly payment, how much you pay for the principle and how much you pay for the interest in the 1st and the 2nd month? f. What will be your interest payments for the first 5 years (year 1 to year 5) and the last 5 years (year 26 to year 30)? g. What is your annual percentage rate (APR)?
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 25-year mortgage loan for 75 percent of the $3,300,000 purchase price. The monthly payment on this loan will be $17,400. a. What is the APR on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the EAR on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
consider a mortgage loan for 180,000 what is the payment if it has a 15 yr ratest 3.5% with closing cost of 1600 and 1 point? what is the monthly payment uf it had a fixed 15 yr rate at 3.25% with closing cost if 1600
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 34-year mortgage loan for 80 percent of the $3,240,000 purchase price. The monthly payment on this loan will be $15,700. What is the APR on this loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the EAR on this loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.