Question

In: Finance

Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...

Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $4,500,000.

Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront.

Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront.

Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, which mortgage has the lowest cost of borrowing (ie lowest annualized IRR)? Type 1 for A, type 2 for B.

Solutions

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $4,500,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the the bank the balance, which mortgage has the lowest cost of borrowing (lowest annualized IRR)
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $1,250,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, what is Ann’s annualized IRR from mortgage A? #2 IRR from mortgage B? I would like to know how to calculate the IRR of this in a BA II
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $1,250,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Assuming Ann makes payments for 30 years, what is Ann’s IRR from mortgage A? Note: IRR is always annualized. If you’ve found a monthly rate, multiply by 12. In this case, two digits for a monthly rate is not enough to avoid rounding errors in the annual rate...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. (A) Assuming Ann makes payments for 30 years, what is Ann’s annualized IRR from mortgage A? (B) Assuming Ann makes payments for 30 years, what is Ann’s annualized IRR from mortgage B? (C)...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, what is Ann’s annualized IRR from mortgage B?
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 30 years, what is Ann’s annualized IRR from mortgage B?
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, what is Ann’s annualized IRR from mortgage A?
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for...
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, what is Ann’s annualized IRR from mortgage A
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $135,000.
Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $135,000. Mortgage A has a 5.25% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 30 years, what is Ann’s annualized IRR from mortgage A?  
12. Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments...
12. Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 30 years, which mortgage has the lowest cost of borrowing (ie lowest annualized IRR)? Type 1 for A, type 2 for B. 13. Ann is looking for...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT