Question
In: Finance
PLEASE SHOW WORK FOR EACH ANSWER 2. Loan Amortization . James wants to buy a house...
PLEASE SHOW WORK FOR EACH ANSWER
2. Loan Amortization . James wants to buy a house worth $1,000,000. To do so, he takes out a mortgage loan equal to the price of the house. The mortgage has to be repaid after 15 years and make monthly payments with an APR of 10%. Given this information, answer the following
(a) . Draw the timeline that describes all cash flows (paid and received) throughout the duration of the loan. On the timeline, you must also indicate what is the last period/payment! Denote the period cash flow payment as C.
(b) How can James calculate what is the payment C he has to make on that loan? (Write down the formula together with all information necessary to calculate the payment C. The final expression should have C on the left side and all other information on the right side of the equation).
(c). After 14 years of paying off the mortgage, James has accumulated enough savings that he wants to pay off the remainder of that loan. How much does James still owe on his mortgage 14 years after he first started making payments? (NOTE: You only need to write down the formula that would calculate the value of the remainder of the loan).
Solutions
jeff jeffy answered 1 year agoRelated Solutions
PLEASE SHOW ALL WORK. 2. A bank is negotiating a loan. The loan can either be...
PLEASE SHOW ALL WORK.
2. A bank is negotiating a loan. The loan can either be paid off
as a lump sum of $100,000 at the end of five years, or as equal
annual payments at the end of each of the next five years. If the
interest rate on the loan is 10% regardless of the payment method,
what annual payments should be made so that both forms of payment
are equivalent? 3. You have an investment opportunity that...
(Loan amortization) To buy a new house, you must borrow $150,000. To do this, you take...
(Loan amortization) To buy a new house, you must borrow
$150,000. To do this, you take out a $150,000, 20-year, percent
mortgage. Your mortgage payments, which are made at the end of
each year (one payment each year), include both principal and 9
percent interest on the declining balance. How large will your
annual payments be?
The amount of your annual payments will be $ (Round to the
nearest cent.)
James wants to buy a house worth $1,000,000. To do so, he takes out a mortgage...
James wants to buy a house worth $1,000,000. To do so, he takes out
a mortgage loan equal to the price of the house. The mortgage has
to be repaid after 15 years and make monthly payments with an APR
of 10%. Given this information, answer the following
(a) 5 points. Draw the timeline that describes all cash flows
(paid and received) throughout the duration of the loan. On the
timeline, you must also indicate what is the last period/payment!...
Susan wants to buy a house for $200,000. US Bank will give her the loan at...
Susan wants to buy a house for $200,000. US Bank will give her
the loan at 3.5% for 30 years if she puts 20% down and Dacotah Bank
will give her the loan at 3.8% for 30 years if she puts 10% down.
There are NO other options. (15 PTS) a. Which loan should she sign
up for? Pick one, no explanation needed. What is her monthly
payment? (5 PTS) b. After 5 years, Susan is approached by a
philanthropic...
Susan wants to buy a house for $200,000. US Bank will give her the loan at...
Susan wants to buy a house for $200,000. US Bank will give her
the loan at 3.5% for 30 years if she puts 20% down and Dacotah Bank
will give her the loan at 3.8% for 30 years if she puts 10% down.
There are NO other options. (15 PTS)
a-Which loan should she sign up for? Pick one, no explanation
needed. What is her monthly payment? (5 PTS)
b-After 5 years, Susan is approached by a philanthropic group
known...
Answer the questions below. Show all work. Loan Amount: $10,000,000.00 Interest Rate: 6-3/4% Amortization: ...
Answer the questions below. Show all work.
Loan Amount: $10,000,000.00
Interest Rate: 6-3/4%
Amortization: 30 years
Term: 10
years
Assume the above loan is interest only for the first three (3)
years.
What is the Annual Debt Service (ADS) in the first year?
How much interest (cumulative) will have been paid at the end of
year 3?
How much principal will be due at maturity?
How much interest will have been paid over the 10...
QUESTION 2: LOAN AMORTIZATION [35 MARKS] Please answer iii only. I already have the answer for...
QUESTION 2: LOAN AMORTIZATION [35 MARKS] Please answer iii only.
I already have the answer for i and ii.
I. A family buys a house worth $326,000. They pay $75,000
deposit and take a mortgage for the balance at J12=9% p.a. to be
amortized over 30 years with monthly payments. A. Find the value of
the mortgage on their house? (1 mark) B. Find the value of the
monthly payment? C. Find the loan outstanding after
making 20 payments? D....
Please show how you got each answer Julie James is opening a lemonade stand. She believes...
Please show how you got each answer
Julie James is opening a lemonade stand. She believes the fixed
cost per week of running the stand is $200. Her best guess is that
she can sell 1000 cups per week at $.80 per cup. The variable cost
of producing a cup of lemonade is $.30?
a) given her other assumptions, what level of sales volume will
enable Julie to break even using goal seek function
b) given her other assumptions, discuss...
Please answer the following: Loan Amortization Your company is planning to borrow $1.5 million on a...
Please answer the following:
Loan Amortization
Your company is planning to borrow $1.5 million on a 7-year, 8%,
annual payment, fully amortized term loan. What fraction of the
payment made at the end of the second year will represent repayment
of principal? Round your answer to two decimal places.
Thank you!
You plan to borrow $500,000 to buy a house. The amortization period of the mortgage is...
You plan to borrow $500,000 to buy a house. The amortization
period of the mortgage is 20 years. You obtain a 5-year fixed rate
mortgage from TD bank at 2%/year (using Canadian mortgage
convention).
(a) How much do you owe the bank after the 60th payment?
(b) For the 24th monthly payment, how much of it is for
interest, and how much of it is for principal repayment?
d) What is the present value of the interest portion of the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella Co.,...
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
- (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image...
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
- We are evaluating a project that costs $1.68 million, has a six-year life, and has no...
ADVERTISEMENT