A.You originally took out a $435,000, 360-month loan 8 years ago and have made 96 monthly...

A.You originally took out a $435,000, 360-month loan 8 years ago and have made 96 monthly payments of $3,161.60. You can now refinance that loan with a new 264-month loan that has an annual interest rate 5.86%. If you refinance the loan, then to the nearest dollar, how much money will you save each month on your monthly mortgage payment?
B.Construct a Loan Amortization Schedule for a $6000, 10% interest rate loan that is re-paid semi-annually over 4 years. (Hint: First solve for the semi-annual payment, then construct the schedule)

Solutions

Expert Solution

Part A:

Difference in monthly payment= $971.22

Calculation as below:

Part B:

Semi annual payments= $928.33

Calculation as below:

Amortization schedule as below:

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Precisely 15 years ago (you have just made the 180th monthly payment) you took out a...

Precisely 15 years ago (you have just made the 180th monthly payment) you took out a traditional, fixed rate 30-year mortgage for $500,000 at 6.80% APR. You are considering whether to refinance this loan and replace it with a fixed rate 15-year mortgage (assume an identical timing of the remaining payments). The closing costs are $3,000, which you intend to borrow. Disregarding the psychic cost of the process, please find the breakeven interest rate (i.e. the rate at which you...

A consumer loan you took out several years ago requires fixed monthly payments of $700.00. You...

A consumer loan you took out several years ago requires fixed monthly payments of $700.00. You just made a payment, and 29 payments remain to be made; the next payment is due in one month. The rate of return used to compute these payments (when the loan was granted) was 21% (APR, compounded monthly). [Use annuity formulas to answer the questions below.] a. What is the present value of the remaining payments, using the APR given above as a discount...

Five years ago you took out a 10-year amortizing loan to purchase an apartment. The loan...

Five years ago you took out a 10-year amortizing loan to purchase an apartment. The loan has 4.0% APR with monthly payments of $1,800. How much do you owe on the loan today? The remaining loan balance is $________. (round to the nearest dollar) How much interest did you pay on the loan in the past year? The interest paid in year five was $______. (round to the nearest dollar) Over the entire period of 10 years, how much interest...

Two years ago you took out a mortgage at 4.5%. The initial balance of the loan...

Two years ago you took out a mortgage at 4.5%. The initial balance of the loan was $200,000 and it was for 25 years (300 months.) Today, you observe that you could take out a new loan at 4.25% (with a 300 month term), but you would have to pay $5,000 in closing and other fees. What is the current value of the loan (liability from your perspective)? *Note: The answer is $195,579.52. I want to know how to get...

(Determining the outstanding balance of a loan) Ten years ago you took out a $ 250,000,...

(Determining the outstanding balance of a loan) Ten years ago you took out a $ 250,000, 20-year mortgage with an annual interest rate of 12 percent and monthly payments of $2,752.72. What is the outstanding balance on your current loan if you just make the 120th payment?

Twenty years ago ABC Inc. took out a $100 million loan with an interest rate of...

Twenty years ago ABC Inc. took out a $100 million loan with an interest rate of 6 percent compounded quarterly over its 35 year life. With interest rates now so low, ABC is now looking to potentially refinance the loan. The accounting department would like to know how much interest was paid on this loan last year If new debt with an interest rate of 4.75 percent compounded quarterly can be raised with a 2 percent flotation cost, should they...

20 years ago DEF Inc. took out a $100 million loan with an interest rate of...

20 years ago DEF Inc. took out a $100 million loan with an interest rate of 6 percent compounded quarterly over its 35 year life. With interest rates now so low, DEF is now looking to potentially refinance the loan. A) The accounting department would like to know how much interest was paid on this loan last year B) If new debt with an interest rate of 4.75 percent compounded quarterly can be raised with a 2 percent flotation cost,...

20 years ago XYZ Inc. took out a $100 million loan with an interest rate of...

20 years ago XYZ Inc. took out a $100 million loan with an interest rate of 6 percent compounded quarterly over its 35 year life. With interest rates now so low, XYZ is now looking to potentially refinance the loan. A. Show how much interest was paid on the loan last year B. If new debt with an interest rate of 4.75 percent compounded quarterly can be raised with a 2 percent flotation cost, should they refinance this loan? Please...

Five years ago you took out a 30-year fixed $300,000 mortgage with monthly payments and an...

Five years ago you took out a 30-year fixed $300,000 mortgage with monthly payments and an APR of 8%, compounded monthly. You have made the normal payments in full, and, this morning, after making a normally scheduled payment, you are paying off the balance by taking out a new 30-year fixed mortgage at a lower APR of 6% (with monthly compounding). How much will each monthly payment be?

Four years ago, your friend took out a 10-year loan for $200,000 from BOA Bank at...

Four years ago, your friend took out a 10-year loan for $200,000 from BOA Bank at a stated interest rate of 10% p.a. with interest compounded quarterly. She has been making equal, quarterly payments on the loan during this time and now wishes to repay the loan in full. The amount that she needs to repay the bank today is closest to: a) $72,524. b) $104,012. c) $142,494. d) $187,678.

Subjects