Assume that you have graduated from college and are a

Assignment Help Accounting Basics

Reference no: EM13609590

Assume that you have graduated from College and are a practicing CPA. One of your clients, Karen Sharpley, a practicing surgeon comes to you for consulting services. On your advice, Karen had refinanced her mortgage when interest rates were extremely low into a fixed rate, 15 year 4.6% annual interest rate instead of buying a mansion for $1.2 million with an adjustable rate mortgage and no money down.
Karen's monthly payments (principal and interest) are currently $2,485.16 per month. She has regularly been prepaying the principal balance on her mortgage and currently owes $ 262,413.43.

Karen has received a raise and has some extra money available each month. She would like to know whether she should pay down her mortgage by adding $500 per month to each payment or whether she should invest the $500 into mutual funds.

A.) How long will it take Karen to pay off the mortgage if she pays only the normal principal and interest payment?

B.) How long will it take Karen to pay off the mortgage if she pays the extra $500 per month to the mortgage?

C.) Assuming that Karen could earn 6% on any extra money that she invests, write her a business letter outlining the pros and cons of her choices along with any other relevant factors that she should consider in making this decision.

Reference no: EM13609590

Questions Cloud

E-commerce models and its applications you have my loin : you have my loin information for the book please look for ltbrgte-commerce business. technology in login if you

What is the relative humidity rh of an air parcel with : a what is the relative humidity rh of an air parcel with temperature 25degc and absolute humidity 8 gm3? see class 4

On the date of a business combination resulting in a : on the date of a business combination resulting in a parent-subsidiary relationship the differences between current

The steel part has a length of 520cm find the length of : an unevenly weighted baton cylindrical in shape consists of two sections a denser lower section and a less dense upper

Assume that you have graduated from college and are a : assume that you have graduated from college and are a practicing cpa. one of your clients karen sharpley a practicing

The higgins company has just purchased a piece of equipment : the higgins company has just purchased a piece of equipment at a cost of 120000. this equipment will reduce operating

What is the probability that if 11 households are selected : a little confused on this one.assume the probability of a household owning a blue-ray player is 0.70.what is the

Find an expression for the angle that will maximize the : your medieval history class is constructing a trebuchet a catapult-like weapon for hurling stones at enemy castles. the

Assuming the diameter of a penny is 200 cm and its mass is : assuming the diameter of a penny is 2.00 cm and its mass is 2.60g what is the minimum air speed needed to lift the

User Account

All Pages