You want to buy a $140000 home. You plan to pay $14000 as a down payment, and take out a 20 year loan at 4.75% interest for the rest. After 7 years, you decide to pay off the entire loan. a) What is the amount of the payment? b) What is the outstanding principal after 7 years? c) If the bank charges 3.5 points on the loan, what is the amount charged for points? d) If the bank charges 3.5 points on the loan, what is the true interest rate?

You want to buy a $140000 home. You plan to pay $14000 as a down payment, and take out a 20 year loan at 4.75% interest for the rest. After 7 years, you decide to pay off the entire loan. a) What is the amount of the payment? b) What is the outstanding principal after 7 years? c) If the bank charges 3.5 points on the loan, what is the amount charged for points? d) If the bank charges 3.5 points on the loan, what is the true interest rate?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 14P

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