Question

In: Finance

You are refinancing your current mortgage with an outstandingloan balance of $280,000 today. The new...

You are refinancing your current mortgage with an outstanding loan balance of $280,000 today. The new loan has 3.9% APR interest rate (compounded monthly) and it requires you to make a monthly payment for the next 30 years. What is your monthly payment under this new loan? Please show your excel formula in your answer and explain step-by-step calculation to arrive to your answer.

Solutions

Expert Solution

PV = 280,000

rate = 3.9%/12 = 0.00325

n = 30 * 12 = 360

Monthly payment = PMT(rate, nper, pv, [fv], [type])

Monthly payment = PMT(0.00325, 360, 280,000)

Ignore [fv] and [type] as they are optional

Monthly payment = $1,320.670972

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

You are considering refinancing your mortgage. Your current loan is at 7% with 14 years left...
You are considering refinancing your mortgage. Your current loan is at 7% with 14 years left and was negotiated one year ago with $2,000 closing costs. The new loan would be 5.5% for 15 years with closing costs of $1,500. Describe how you would decide whether to refinance. Include qualitative considerations. Provide examples of your calculations
Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate. If...
Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate. If you took out a new 30 year mortgage at 6% for your remaining loan balance your new monthly payments would be $675.58. House was $140,000 paying10% as down payment (14000) and 9% interest for the next 30 years a. how much interest will you pay over the life of the new loan? b. notice that if you refinance your house you are going to...
As the new vice-president of finance, you are considering refinancing existing bonds with a new issue....
As the new vice-president of finance, you are considering refinancing existing bonds with a new issue. You note in particular a bond issue that has the following details: Maturity value of bond issue $ 67,000,000 Time to maturity (in years) 10 Time since initial bond issue (in years) 8 Annual coupon rate on existing bond 12.0% Call Premium No call allowed during the first 5 years Starting call premium in year 6 11% Call premium declines by 0.5% per year...
When you apply for a new mortgage to replace an old mortgage this may lower your...
When you apply for a new mortgage to replace an old mortgage this may lower your monthly payments, if the interest rates are lower, but have negative implications for your amortization, Research the concept of amortization and identify the negative consequences of a new mortgage with lower payments. One to two paragraph.
You have just taken out a 30‑year mortgage on your new home for$103,104. This mortgage...
You have just taken out a 30‑year mortgage on your new home for $103,104. This mortgage is to be repaid in 360 equal monthly installments. If the stated (nominal) annual interest rate is 13.35 percent, what is the amount of each of the monthly installments? (Note: The convention when periodic payments are involved is to assume that the compounding frequency is the same as the payment frequency, unless stated otherwise. Thus this implies 13.35 % APR, compounded monthly for this...
You need a 22-year, fixed rate mortgage to buy a new home for $290,000. Your mortgage...
You need a 22-year, fixed rate mortgage to buy a new home for $290,000. Your mortgage bank will lend you the money at an annual interest rate of 6.5% APR and annual compounding. What is your annual payment?
1. Jacqueline and Keith Sommers are considering the implications of refinancing their 30-year mortgage (interest rate...
1. Jacqueline and Keith Sommers are considering the implications of refinancing their 30-year mortgage (interest rate = 7.25%) that they purchased 5 years ago at $300,000 (20% down payment and 80% mortgage loan monthly payment). Now after 5 years (60 monthly payments) the balance of loan has been reduced to $226,509.07. Rates have declined considerably, and a major refinancing frenzy is underway. They are trying to determine whether they should go in for a 15-year mortgage at 2.75% per year...
Prepare an amortization schedule (monthly) for a 30yr mortgage on a building that costs $280,000. 20%...
Prepare an amortization schedule (monthly) for a 30yr mortgage on a building that costs $280,000. 20% down was required to get at an APR of 5%, the rest of the cost was financed. Compare the principle balance and the interest in the first, second, fifth, tenth, twentieth, and thirtieth year. Now prepare an amortization schedule for a 20yr mortgage on the same building. Compare the principle balance and interest in the same years as you did in the 30yr mortgage.
You need a 30-year, fixed-rate mortgage to buy a new home for $290,000. Your mortgage bank...
You need a 30-year, fixed-rate mortgage to buy a new home for $290,000. Your mortgage bank will lend you the money at a 5.85% APR (semi-annual) for this 360-month loan. However, you can afford monthly payments of only $1,300, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at...
You need a 30-year, fixed-rate mortgage to buy a new home for $290,000. Your mortgage bank...
You need a 30-year, fixed-rate mortgage to buy a new home for $290,000. Your mortgage bank will lend you the money at a 5.85% APR (semi-annual) for this 360-month loan. However, you can afford monthly payments of only $1,300, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT