You want to buy a $280000 home. You plan to pay $56000 as a down payment, and take out a 15 year loan at 3.5% interest for the rest. a) What is the amount of the payment? $1601.34 b) If the bank charges 3 points on the loan, what is the amount charged for points? $6720 PLEASE ONLY ANSWER C, ALL OTHER QUESTIONS ARE ANSWERED. c) If the bank charges 3 points on the loan, what is the true interest rate?
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
#1 You want to buy a $280000 home. You plan to pay $56000 as a down payment, and take out a 15 year loan at 3.5% interest for the rest.
a) What is the amount of the payment? $1601.34
b) If the bank charges 3 points on the loan, what is the amount charged for points? $6720
PLEASE ONLY ANSWER C, ALL OTHER QUESTIONS ARE ANSWERED.
c) If the bank charges 3 points on the loan, what is the true interest rate?
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