You got a very high paying job at career fair and plan on buying a very nice home in your new city. You will need a loan to purchase the house and the loan will need to be for $1,200,000, which is above the conforming loan limit and therefore is considered a Jumbo Loan. The term will be for 30 years at a nominal interest rate of 3.75%, compounded monthly. The loan requires paying 1.2 Points to acquire the loan. Calculate the following: Part A: Calculate the Jumbo Loan payment. Part B: Calculate the Annual Percentage Rate on your Jumbo Loan, assuming the Points are the only fees associated with the loan. Part C: After 12 months, how much of the loan principal have you paid off?
You got a very high paying job at career fair and plan on buying a very nice home in your new city. You will need a loan to purchase the house and the loan will need to be for $1,200,000, which is above the conforming loan limit and therefore is considered a Jumbo Loan. The term will be for 30 years at a nominal interest rate of 3.75%, compounded monthly. The loan requires paying 1.2 Points to acquire the loan. Calculate the following: Part A: Calculate the Jumbo Loan payment. Part B: Calculate the Annual Percentage Rate on your Jumbo Loan, assuming the Points are the only fees associated with the loan. Part C: After 12 months, how much of the loan principal have you paid off?
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 14P
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Transcribed Image Text:You got a very high paying job at career fair and plan on buying a very nice home in your new
city. You will need a loan to purchase the house and the loan will need to be for $1,200,000,
which is above the conforming loan limit and therefore is considered a Jumbo Loan. The term
will be for 30 years at a nominal interest rate of 3.75%, compounded monthly. The loan
requires paying 1.2 Points to acquire the loan. Calculate the following:
Part A:
Calculate the Jumbo Loan payment.
Part B:
Calculate the Annual Percentage Rate on your Jumbo Loan, assuming the Points are the only
fees associated with the loan.
Part C:
After 12 months, how much of the loan principal have you paid off?
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