Question
In: Accounting
Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down...
Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down payment. His plans call for making additional monthly deposits into an investment account over the next 36 months. Billy McMahon wants to make the purchase 48 months from today and wants to have $180,000 saved up for the down payment.
a. What is the amount of each of the additional payments he must make for his plan to work out? Assume Billy can earn 2% annual return in his investment account.
b. Prepare an amortization schedule proving the answer you computed in a. is correct.
c. If Billy takes out a 30-year, $720,000 mortgage at 4%, what will his mortgage payments be?
d. Prepare an amortization schedule to prove that your answer is right and his mortgage will be paid off in 30 years.
e. Assume he pays an additional $800 towards his mortgage each month. How much sooner will he be able to pay off her mortgage?
f. Prepare an amortization schedule proving your answer in e.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down...
Billy McMahon is interested in buying a waterfront condo and has
saved $100,000 for the down payment. His plans call for making
additional monthly deposits into an investment account over the
next 36 months. Billy McMahon wants to make the purchase 48 months
from today and wants to have $180,000 saved up for the down
payment.
A) What is the amount of each of the additional payments he must
make for his plan to work out? Assume Billy can earn...
Billy McMahon is interested in buying a waterfront condo and has saved $100,000 for the down...
Billy McMahon is interested in buying a waterfront condo and
has saved $100,000 for the down payment. His plans call for making
additional monthly deposits into an investment account over the
next 36 months. Billy McMahon wants to make the purchase 48 months
from today and wants to have $180,000 saved up for the down
payment.
What is the amount of each of the additional payments he must
make for his plan to work out? Assume Billy can earn 2%...
Jacqui has already saved $575,000 as a deposit for a new waterfront villa in the Hamptons.
Jacqui has already saved $575,000 as a deposit for a new waterfront villa in the Hamptons. It will cost her a total of $3.5 million to purchase this property. She plans to borrow the rest from CityGroup over 15 years at a rate of 3.2% p.a. compounding monthly. What would be Jacqui's monthly repayments?
Jaime is buying her first house. He has saved $30,000 for a down payment. The bank...
Jaime is buying her first house. He has saved $30,000 for a down
payment. The bank requires 20% down and she found a 30-year loan
for 4.9% interest. Jaime finds a house for the maximum amount he
could afford. (A) How much can Jaime afford for her house? (B) Find
the amount of the mortgage. (C) Find the monthly payment. (D) How
much did he end up paying? How much of that was interest?
1. You are interested in buying a 2-bedroom condo in Cincinnati. The price is $300,000. You...
1. You are interested in buying a 2-bedroom condo in Cincinnati.
The price is $300,000. You have a 30-year 3% APR mortgage with 20%
down payment.
a. What would be the monthly mortgage payment?
b. Suppose you rent the property out and the rental you collect
will just cover the
mortgage payment. You plan to keep the property till the
mortgage matures and do not plan to make any pre-payment. What is
your annual investment return (please calculate the bond-equivalent...
Suppose you are buying your first condo for $160,000, and you will make a $15,000 down...
Suppose you are buying your first condo for $160,000, and you
will make a $15,000 down payment. You have arranged to finance the
remainder with a 30-year, monthly payment, amortized mortgage at a
4.5% nominal interest rate, with the first payment due in one
month. What will your monthly payments be?
You are buying your first condo for $220,000 and are making a $20,000 down payment. You...
You are buying your first condo for $220,000 and are making a
$20,000 down payment. You have arranged to finance the remaining
amount with a 30-year monthly payment amortized mortgage at a 5.75%
nominal interest rate. What will your monthly payments be?
a. $1,167.15
b. $1,900.88
c. $1,200.93
d. $1,962.70
e. $1,324.02
f. $2,100.04
What is the estimated payoff on the mortgage question above
after you have paid for 10 years? Show how you obtained the
mortgage balance using Excel...
Bella Wans is interested in buying a new motorcycle. She has decided to borrow the money...
Bella Wans is interested in buying a new motorcycle. She has
decided to borrow the money to pay the $20,000 purchase price of
the bike. She is in the 25% income tax bracket. She can either
borrow the money at an interest rate of 4% from the motorcycle
dealer, or she could take out a second mortgage on her home. That
mortgage would come with an interest rate of 6%. Interest payments
on the mortgage would be tax deductible for...
Bella Wans is interested in buying a new motorcycle. She has decided to borrow the money...
Bella Wans is interested in buying a new motorcycle. She has
decided to borrow the money to pay the $30,000 purchase price of
the bike. She is in the 33% income tax bracket. She can either
borrow the money at an interest rate of 5% from the motorcycle
dealer, or she could take out a second mortgage on her home. That
mortgage would come with an interest rate of 8%. Interest payments
on the mortgage would be tax deductible for...
Petersen, one of your cli-ents, has indicated that Jacobsen is interested in buying Petersen’s interest in...
Petersen, one of your cli-ents, has indicated that Jacobsen is
interested in buying Petersen’s interest in the
partnership.Relevant information:Information regarding partners: .
. . . . . .Partner . . . . . . . . . . . . . . . . . . . . . . . .
.JacobsenPetersenOlsenPartner’s capital balance . . . . . . . . . .
.$150,000$100,000$50,000Partner’s profit and loss percentage. .
.30%50%20%Information regarding net asset values:Account title . .
....
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 1. What is the historical role of investment bankers ? Has this role changed ? Why...
- How were the original Internet requirements met through its design? What are the two main requirements...
- discuss crowdfunding on platforms: What features of the services incorporate virality? What are some of the...
- A textbook of mass 2.08 kg rests on a frictionless, horizontal surface. A cord attached to...
- Describe a time when someone did not really listen to or understand a point you were...
- Enumerations Create an advanced enumeration to represent months (JANUARY – DECEMBER) called enuMonths Add internal properties...
- What is the minimum size of the automorphism group of a simple directed graph having more...
ADVERTISEMENT