In: Finance

# 3. A borrower has a 30-year mortgage loan for $200,000 with an interest rate of 5%... 3. A borrower has a 30-year mortgage loan for$200,000 with an interest rate of 5% and monthly payments. If she wants to pay off the loan after 8 years, what would be the outstanding balance on the loan?
(A) $84,886 (B)$91,246
(C) $171,706 (D)$175,545

## Solutions

##### Expert Solution

EMI = Loan amount / PVAF (r%, n)

where r is int rate per month and n is no. of months

= $200,000 / PVAF (0.4167%, 360) =$ 200,000 / 186.2816

= 1073.64

Loan Amortization:

I have broken the excel sheet into 3 pictures as I couldn't able to take one pic

A borrower takes out a 30-year mortgage loan for $100,000 with an interest rate of 6% plus 4 points. Payments are to be made monthly. a. What is the effective cost of borrowing on the loan if the loan is carried for all 30 years? b. What is the effective cost of borrowing on the loan if the loan is repaid after 10 years? ##### A borrower takes out a 30-year mortgage loan for$250,000 with an interest rate of 6%...
A borrower takes out a 30-year mortgage loan for $250,000 with an interest rate of 6% and monthly payments. What portion of the first month's payment would be applied to interest? ($1250) Assume the question above was a negative amortization loan, what would be the balance after 3 years?