You need a loan of $155,000 to buy a home. Choice 1: 30-year fixed rate at 7% with closing costs of $2600 and no points. Choice 2: 30-year fixed rate at 6.5% with closing costs of $2600 and 2 points. What is the total closing cost for choice 1? What is the total closing cost for choice 2? Why might choice 1 be the better choice? • A. The closing costs are lower. • B. The closing costs are higher. • C. The monthlv payment is lower. • D. The monthly payment is higher. Why might choice 2 be the better choice? • A. The closing costs are lower. • B. The closing costs are higher. C. The monthly payment is lower. © D. The monthly payment is higher.

You need a loan of $155,000 to buy a home. Choice 1: 30-year fixed rate at 7% with closing costs of $2600 and no points. Choice 2: 30-year fixed rate at 6.5% with closing costs of $2600 and 2 points. What is the total closing cost for choice 1? What is the total closing cost for choice 2? Why might choice 1 be the better choice? • A. The closing costs are lower. • B. The closing costs are higher. • C. The monthlv payment is lower. • D. The monthly payment is higher. Why might choice 2 be the better choice? • A. The closing costs are lower. • B. The closing costs are higher. C. The monthly payment is lower. © D. The monthly payment is higher.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter5: Making Automobile And Housing Decisions

Section: Chapter Questions

Problem 8FPE

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Kranscript You need a loan of $150,000 to buy a home. Calculate your monthly payments and total closing costs for each choice below. Briefly discuss how you would decide between the two choices Choice 1: 20-year fixed rate at 4% with closing costs of $1300 and no points. Choice 2: 20-year fixed rate at 3.5% with closing costs of $1300 and 3 points. What is the monthly payment for choice 1? (Do not round until the final answer. Then round to the nearest cent as needed.) What is the monthly payment for choice 27 (Do not round until the final answer. Then round to the nearest cent as needed.) What is the total closing cost for choice 17 What is the total closing cost for choice 27 CITT
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4. You want to buy a house that costs $620,000. You can put $55,000 down. You get a 30 year fixed-rate loan with an APR of 4.5% compounded monthly. Mor Determine the monthly payment. Show clear work. Work: Work: Answer: Find the total closing costs if they consist of a fee of $1600 and 3 points. Answer: www Suppose that you invest $4800 in an account with an APR of 6.9%, compounded continuously. Determine how much you will have after 3 years. Assume that no additional deposits are made.
1. You are purchasing a home for $300,000 and have a 20% down payment. You are deciding between a conventional loan for 5% where you would need to pay 2 points, or an FHA loan for 6% where you only pay 1 point. a. How much will points in each example cost in dollars? b. What are some factors determining which loan you choose?
(Q) You would like to purchase a home and are interested to find out how much you can borrow. When your lender calculates your debt to income ratio, he determines that your maximum monthly payment can be no more than $3, 200. You would like to have a 30 year fully amortizing loan and the interest rate offered on such a loan is currently 8.5%. Given these constraints, what is the largest loan you can obtain?
Required: a to d. Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $55,000. Assuming that she puts 20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? e. What is the savings in interest cost between 3.50% and 5%? f. If Harriet uses 30 years instead of 25 for both 5% and 3.50%, what is the difference in interest? Complete this question by entering your answers in the tabs below. Required A to Required E Required F D Harriet Marcus is concerned about the financing of a home. She saw a small cottage that sells for $55,000. Assuming that she puts 20% down, what will be her monthly payment and the total cost of interest over the cost of the loan for each assumption? Note: Do not round intermediate calculations. Round your answers to the nearest cent. Monthly payment Total cost of interest a. 25 Years, 5% b. 25 Years, 4.5% c. 25 Years, 4% d. 25 Years, 3.5%
D. Discuss the payback method and what the payback periods of the old backhoes and new backhoes reveal about whether the company should purchase new backhoes or continue using the old backhoes. Calculate the profitability index for keeping the old backhoes and purchasing new backhoes. The following information is available to use in deciding whether to purchase the new backhoes or old backhoes. Using the 8% Present Value of an Annuity of 1. Old Backhoes New Backhoes Purchase cost when new $90,000 $200,000 Salvage value now $42,000 Investment in major overhaul needed in next year $55,000 Salvage value in 8 years $15,000 $90,000 Remaining life 8 years 8 years Net cash flow generated each year $30,425 $43,900 Answer that Bartebly provided is down below. My Questions is: Can you display what Pv factor you used to get the a present value calculations. can you leave the the present value calculations to 6 digits.…