Your parents buy a new house to downsize. They pay $250,000 and are planning on paying it off in a 15 year loan with equal annual payments of $19,167. What interest rate do you evaluate them to be paying on the loan?

Q: A while ago, a couple purchased a home with a sales price of $810,000, making a 5% down payment and…

A: Annual worth distributes present worth into equivalent uniform value over its useful life.

Q: (spread sheet) supposed that your parents are willing to lend you $20,000 for part of the cost of…

A: The calculation is as follows:

Q: JOSH WANTS TO BUY A HOUSE AND WOULD NEED A $200,000 LOAN. HE WILL AMORTIZE THE LOAN FOR OVER 15…

A: Solution Firstly lets calculate the annual installment Annual installment          = loan amount/…

Q: Kristina is going to finance new office equipment at a 5% rate over a 1.5 year term. If she can…

A: Using excel PV function

Q: You graduate and receive a $3,000 cheque from your grandparents. You decide to save it toward a down…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 30-year…

A: Amount to be financed = Cost of house - Down payment = $415,000 - ($415,000*20%) = $332,000 Nos of…

Q: A couple want to buy a house priced at $140,200. Last year, the property tax and fire insurance…

A: Monthly Property Tax = 2112/12 = 176 Monthly Insurance Bill = 750/12 = 62.5 House Price = 140,200…

Q: A family wants to purchase a house that costs $135,000. They plan to take out a $125,000 mortgage on…

A: A mortgage is a loan on a property where the collateral is the property itself.

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 15-year…

A: 1)  Loan Amount = 80% of 415,000 = $332,000.

Q: you live in the mobile home for four years, but your roommate also pays you $3,000 a year, paid to…

A: Present Value: The worth of the cash flow or stream of payments that would be received in the future…

Q: Fatzamata and Maggie have $30,000 for a down payment on a future house. Their budget can accomodate…

A: Given: Amount available for downpayment : $30,000 Monthly mortgage payment: $1200 The amount owed to…

Q: After you purchase the house, you decide to do some remodeling in the kitchen.  You ask your parents…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: You are looking to buy a $275,599.00 home in Haverhill. If Bank of America will give them a 30-year…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: A couple will retire in 50 years; they plan to spend about $35,000 a year in retirement, which…

A: given information   reirement period = 25 years spend in a retirement period for a year $35,000…

Q: Ken wants to remodel his basement and he wants to pay back no more than $18,000. If he gets a low…

A: Given Information, Payment made after 3 years =$18,000 Interest rate =0.0375/2=0.01875(As the period…

Q: A couple will retire in 50 years; they plan to spend about $32,000 a year in retirement, which…

A: Information: a) In part 1,we first have to calculate the present value of annual payments at time=50…

Q: 4. You wish to purchase a house that costs $294,000, and the bank requires you to have 12% of the…

A: A down payment is an early stage payment made for a particular good purchased through financing.

Q: A public relations specialist earns $47,500 salary each year. He/she wants to spend no more than…

A: Here, Annual salary = $47,500 Down payment = 15% No. of years = 25 years Interest rate = 4%…

Q: Louisa is purchasing a 125000 home and her bank is offering her a 30-year mortgage at a 475%…

A: The value of loan, at time zero, nets to the amount of total loan and the down-payment made at…

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 30-year…

A: For the calculation I have used the above given formula and got the monthly payment to be…

Q: Susanna wants to purchase a house costing $212,286. She plans to put $51,874 toward a down payment…

A: Cost of house = $ 212,286 Down payment = $ 51,874 Mortgage amount (PV) = 212286-51874 = $ 160412…

Q: Bro decides to take out a loan for $50,000 for 5 years at 7% monthly. If he pays an extra $200 per…

A: Installment is the periodic amount paid by the borrower to the lender in order to pay back the loan…

Q: A family wants to purchase a house that costs $135,000. They plan to take out a $125,000 mortgage on…

A: Data given: Monthly payment for 15 year mortgage= $718.77 Monthly payment for 30 year mortgage= $…

Q: enny purchase a house for a selling price of 310,000 and need to make a 15% down payment. The…

A: Loans are paid by the monthly payments these are equal monthly payments that carry the payment for…

Q: Evan and Emmanuel want to buy a $250,000 home. They plan to pay 15% as a down payment, and take out…

A: Cost of House is $250,000 Down payment is 15% Term of loan is 30 years Interest rate is 4.9% To…

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 15-year…

A: Monthly Payment = $2,333

Q: Johnny and Lucy have purchased a home for $365,000. They will need to obtain a mortgage for 85% of…

A: Loan amortization table shows the bifurcation of each monthly payment in the interest payment and…

Q: Carl and Melissa have a monthly income of $6000. They want to buy a house for $200,000 and make a…

A: Carl and Melissa have a monthly income of $6000. The cost of the house is $200,000. Down payment of…

Q: Larry wants to make a decision on a six- year amortized loan for him to buy a new car. The value of…

A: It will be enough if the present value of monthly payment of $700 is equal to or more than the car…

Q: A couple who wants to purchase a home with a price of $340,000 has $100,000 for a down payment. If…

A: Loan: The loan is a value that is borrowed from external sources like banks and this amount is…

Q: A while ago, a couple purchased a home with a sales price of $780,000, making a 5% down payment and…

A: Monthly paymentThe minimum value that is needed to be paid each month by an individual for a stated…

Q: A couple is trying to decide between renting or buying a house. They could buy a new home with a…

A: It is required to compare the present value of the cost of both the options. The option with the…

Q: What is their current balance of their loan?

A: Loan is the net amount of borrowings that a borrower (who needs money) takes from the lender (who…

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 30-year…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Your friend is currently paying $734 in rent monthly in Fort Wayne and would rather apply the…

A: We need to use excel PV function to calculate amount borrow or loan value. The formula is…

Q: Suppose that your parents are willing to lend you $20,000 for part of the cost of your college…

A: Calculation of interest rates as follows:

Q: A couple will retire in 50 years; they plan to spend about $32,000 a year in retirement, which…

A: The problem is based on the concept of time value of money which says that money received today is…

Q: Marie and Danny Would like to buy a house for $220,000. The down payment for the mortgage is 30% of…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: “Suppose that your parents are willing to lend you $20,000 for part of the cost of your college…

A: Computation:

Q: Suppose that, to purchase a car, you are obtaining a personal loan from your uncle in the amount of…

A: Given information: Amount of personal loan is $75,000 Number of years to be repaid is 3 years…

Q: Anna and Doug are in the market for a new house. The maximum payment they can afford is $700 per…

A: The loan amount will depend upon the periodic payment, interest rate and the duration of the loan

Q: McBertys have $20,000 in savings to use as a down payment on a new home. They also have determined…

A: Given,  Down payment is $20,000 Payment is $1500 to $1800 Rate is 11% Term of loan is 30 years

Q: A couple purchased their home for $280,000. They signed a 30 year mortgage at 5.28% interest…

A: Given: Cost of house = $280,000 Interest rate = 5.28% Period = 30 years Compounding monthly.

Q: You have just taken out a mortgage of $50,000 for 30 years, with monthly payments at 6% interest.…

A: Time value tells that money received today has more value than that of receiving the exact value…

Q: A couple will retire in 40 years; they paln to spend about $23,000 a retirement, which should last…

A: The stream or series of payments that are to be made at specific time intervals is known as annuity.…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.