You just bought the first floor of the famous Building for $250,000. You plan to rent...

You just bought the first floor of the famous Building for $250,000. You plan to rent the space to convenience stores. Your banker has offered you a mortgage with the following terms:

The mortgage is for the full amount of $250,000.
The mortgage will be repaid in equal monthly payments over 36 months, starting 1 month from now.
The annual interest rate on the mortgage is 8%, compounded monthly.

You have to pay the bank an initiation charge of $1,500 and 1 point.

What is the monthly payment you will pay the bank?

What is the EAR of the mortgage?

Compute an amortization table for the amount you get (not the amount you borrow).

Expert Solution

Formulae

Formulae as above

jeff jeffy answered 2 years ago

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