Suppose you take a 27-year mortgage of $280000. The annual interest rate is 4%, and the...

Suppose you take a 27-year mortgage of $280000. The annual interest rate is 4%, and the annual APR is 4.6%. Compounding done on yearly basis. Loan payments are made annually. Calculate the amortized fees and expenses for this loan (in dollars, provide your answer with $1 precision).

Solutions

Expert Solution

Calculate the payment is interest rate is 4%:

Therefore, payment is $17,146.79.

Calculate the payment is interest rate is 4.6%:

Therefore, payment is $18,319.48.

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Calculate the Fee:

Fee = Difference of annual payments

= $18,319.48 - $17,146.79

= $1,172.69

Therefore, the fee is $1,172.69 or $1,173.

jeff jeffy answered 9 months ago

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