You want to buy a house and received the following loan quotes. What is the incremental cost of Loan B? Select the closest figure LTV Rate Loan A 80% 4.0% Loan B 90% 4.5% O 7.5% O 4.0% O 10.5% • 4.5% 8.5% O 9.5%
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- Calculate the CAT (total annual cost) for option 1 and then find which option is better to ask for a loan and explain why is it better. 1. Personal Loan MNL Bank 2.25% simple monthly interest rate 2. Savings Bank CAT= 30% 3. XYZ Bank CAT= 28.30% 4. 123 Bank CAT= 26.64%Consider a loan repayment plan described by the following initial value problem, where the amount borrowed is B(0) = $40,000, the monthly payments are $600, and B(t) is the unpaid balance of the loan. Use the initial value problem to answer parts a through c. B' (+) =0.03B - 600, B(0) = 40,000 a) Find the solution of the initial value problem and explain why B is an increasing solution. B(t) = Why is B an increasing function? O A. The function is increasing because it is an exponential function with a positive coefficient and a negative exponent. O B. The function is increasing because it is an exponential function with a positive coefficient and a positive exponent. O C. The function is increasing because it is an exponential function with a positive exponent. O D. The function is increasing because it is an exponential function with a positive coefficient. b) What is the most that you can borrow under the terms of this loan without going further into debt each month? The…Liam needs to calculate the monthly payment for a loan to purchase the Charles Street property. Calculate the payment as follows: a) For the nper argument, use the Term_in_Months (cell D5) to specify the number of periods. b)For the pv argument, use the Loan_Amount (cell B8) to include the present value. c)Insert a negative sign (-) after the equal sign in the formula to display the result as a positive amount.
- Please build an excel spreadsheet and show the formulas 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)?[This is a loan payment problem. Also considered a time value of money or TVM problem. You need to solve for PMT.] Marco is buying a home. The selling price is $240,000. The seller is paying a 6% commission, the bank is requiring a 20% down payment, Marco has a credit score of 750, the loan interest is 5.5%, and the length of the loan is 30 years. a. What is the monthly house payment for principal and interest? (Answer in dollars). b. What is the total Marco will pay for the house over the 30 years? (Answer in dollars).You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = Amount of Loanx Interest Ratex Term of Loan where FsFs is the finance charge for the loan, and the term of the loan is in . You’re borrowing $10,000 for two years with a stated annual interest rate of 6%.
- Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan? Group of answer choicessuppose that you decide to borrow $15,000 for a new car. you can select one of the following loans, each requiring regular monthly payments. Installment loan A: 3-year loan at 5.9% Installment loan B: 5-year loan at 6.4% a.- find the monthly payments and the total interest for loan A b.-find the monthly payments and the total interest for loan B c.- compare the two loans. which is more economical?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.
- Please show me how to solve this in excel using an excel spreadsheet and please show the excel formulas! Thank You! A house price of $100,000 can be financed with two loans below with monthly payments. The total origination cost associated with these two loans in the table attached is $3000. Alternatively, the borrower can borrow one loan in the amount of $90,000 with monthly payments and origination cost of $2,000. What should the interest rate be on the loan of $90,000 so that the borrower will be indifferent between these two choices?Using the information provided please show all work and formulas in excel ! Suppose that you have two loan choices with monthly payments (a) What is the incremental borrowing cost of $30,000 for loan 1 over loan 2 if you hold the loan for the entire term and there are no origination costs for the two loans? (b) What is the incremental borrowing cost of $30,000 for loan 1 over loan 2 if you hold the loan for only 6 years (72 months) and there are no origination costs for the two loans?Q.Considering the following information, what is the net benefit if the borrower refinances the loan (benefit analysis)? Initial Loan balance: 600,000 Initial loan term: 30 years Current Loan interest: 5.25% Remaining term on current loan: 15 years New loan term: 15 years New loan interest: 2.75% Cost of refinancing: 5% of the loan amount Expected holding period: 7 years Using Excel