About the effective interest rate

Assignment Help Financial Management

Reference no: EM13880061

On January 2013, Professor Lee buys a house. Here is the information

Price = 250,000

LTV (loan to value) = 80%

Interest Rate = 8%

Other cost = 4%

1. What is the effective interest rate?

2. If from January 2013, Professor Lee plans to sell his house after 15 years. What is the effective interest rate for Professor Lee in Jan 2013?

3. From January 2013, after 8 years, the market interest rate is 7.5%, do you suggest Professor Lee to refinance his house (if the bank agrees to refinance for 22 years, and charge 4% of cost for refinance)?

Reference no: EM13880061

Questions Cloud

List the techniques used for gathering evidence : List the techniques used for gathering evidence

Explain the crime bertha committed : Discuss whether Bertha committed a crime and outline the elements of criminal law the prosecutor would use to determine a crime was committed. Explain the crime Bertha committed. Use the elements of criminal law to substantiate your ideas

Valuation of declining growth stock : Martell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 7% pe..

Distinguish among the focuses of the gaas standards : Distinguish among the focuses of the GAAS standards of fieldwork and standards of reporting.

About the effective interest rate : On January 2013, Professor Lee buys a house. Here is the information. What is the effective interest rate? If from January 2013, Professor Lee plans to sell his house after 15 years. What is the effective interest rate for Professor Lee in Jan 2013?

Determining the maximum allowable power : What is the maximum allowable power if the chip is flush mounted in a substrate that provides for an unheated starting length of 20 mm?

Explain who is most likely to engage in this act : Explain how this attack was most likely orchestrated. Explain who is most likely to engage in this act, that is, whose habits and limitations are clearly suited to such conduct and why

Explain how an audit trail might get lost : Explain how an audit trail might get lost within a computerized system.

What was lance murdocks rate of return : If you are offered $340,000 in 15 years and you can earn 13 percent on your money, what is the present value of $340,000? Lance Murdock purchased a wooden statue of a Conquistador for $7,500 to put in his home office 6 years ago. Lance has recently m..

User Account

All Pages