Amount of interest in five payment of the new mortgage

Assignment Help Financial Management
Reference no: EM13878396

You take out a 30-year $500,000 mortgage at an effective annual interest rate of 8%. Immediately after your 12th payment, you make an additional principal repayment of $50,000, and then refinance the outstanding balance with a new 15-year mortgage at a 4% effective annual interest rate. Both mortgages require annual year-end level amortization payments. Find the amount of interest in the 5th payment of the new mortgage.

Reference no: EM13878396

Questions Cloud

Determine the magnitudes : If F= 30° and the resultant force acting on the gusset plate is directed along the positive x axis, determine the magnitudes of F2 and the resultant force.
Should highvalu accept the given offer : HighValu Inc. manufactures a moderate-price set of lawn furniture (a table and four chairs) that it sells for $225. It currently manufactures and sells 6,000 sets per year. Required Should HighValu accept the offer?
Write a paper for me on google : Write a paper for me on GOOGLE HERE ARE THE INSTRUCTIONS. It should be 5-7 pages long, not counting titles, abstract, references, table of contents, charts and balance sheets. It should be 1500 words of your own writing. Extensive quotes will not ..
Why are some firms large and other firms small : Why are some firms "large" and other firms "small"? Use the concepts of "coordinating costs" in your answer
Amount of interest in five payment of the new mortgage : You take out a 30-year $500,000 mortgage at an effective annual interest rate of 8%. Immediately after your 12th payment, you make an additional principal repayment of $50,000, and then refinance the outstanding balance with a new 15-year mortgage at..
Define terms customer lifetime and customer referral value : Define the terms customer lifetime value (CLV), and customer referral value (CRV). Which of these values do the authors believe is more important for financial success? Why"
What is the duration of bond if coupons are paid annually : Consider a bond with settlement date 12/12/2003. The maturity date of the bond is 11/15/2012. The coupon rate of the bond is 7% and the bond pays coupons semiannually. The bond is selling at a yield to maturity of 8%. Find the duration of the bond. W..
Would a practice contribute to overall economic efficiency : Developers frequently buy land and hold it on speculation; in effect they "bank" land. Should firms be permitted to buy and bank pollution rights in the same say? Would such a practice contribute to overall economic efficiency?
What is a stereotype? : What is a stereotype? How do stereotypes relate to the findings of this demonstration?

Reviews

Write a Review

Financial Management Questions & Answers

  What is its after-tax cost of debt

Micro Spinoffs, Inc., issued 20-year debt a year ago at par value with a coupon rate of 5%, paid annually. Today, the debt is selling at $1,120. If the firm’s tax bracket is 30%, what is its after-tax cost of debt? (Do not round intermediate calculat..

  Describe the operating cycle and the cash cycle

Describe the operating cycle and the cash cycle. What are the differences? What are days sales outstanding (DSO) and why is this calculation important to a business?

  Calculate the beta of a portfolio

What is the beta of an asset with an expected return of 16%, if the risk-free rate of interest is 6% and the expected market portfolio risk premium is 6%? Accurate to two decimal places.

  What is the status of the net float

A firm has $16,718 in outstanding checks that have not cleared the bank. The firm also has $13,450 in deposits that have been recorded by the firm but not by the bank. The current available balance is $11,407. What is the status of the net float?

  Jim roberts is in the personal tax bracket

Jim Roberts is in the 35% personal tax bracket. He is considering investing in FPC bonds that have an interest rate of 9.3%. 2 .a. What is his after-tax yield (interest rate) on the bonds?   2 .b. Suppose Mercy Hospital (a not for profit) is offer..

  Explain roles of limited liability corporations

Write a 700- to 1,050-word paper in which you explain roles of limited liability corporations, limited liability partnerships, and Class C Corporations. If you were establishing your own business, under what circumstances would you choose one instead..

  How much will the firm pay if it takes the cash discount

Lyman Nursuries purchased seeds costing $25,000 with terms of 3/15 net 30 EOM on January 12. How much will the firm pay if it takes the cash discount? What is the approximate cost of giving up the cash discount, the simplified formula?

  What do you suggest as a cost-effective approach

What do you suggest as a cost-effective approach to capital budgeting analysis when a project contains real options

  Medical expenses-preferred provider organization plan

Margo, age 35, was severely injured in an auto accident. She is covered under her employer’s preferred provider organization (PPO) plan. The plan has a $1000 calendar-year deductible, 80/20 percent coinsurance, and an annual out-of-pocket limit of $3..

  Withdraw immediately upon retirement

You would like to retire at age 65. After consulting an actuarial table, you believe that you will likely live for 30 years in retirement. You estimate that you will require $7,000 per month in living expenses in retirement which you will begin to wi..

  Equivalent uniform annual cost analysis method

Two alternatives are suggested for improvement to a power generation plant. Alternative A costs $60,000 and provides yearly benefit of $16,000. Alternative B requires $84,000 of initial cost. However, it will yield benefits in the order of $22,000 pe..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd