Determine the apr

Assignment Help Accounting Basics
Reference no: EM133133851

Question - You are a new loan officer with Alpha Mortgage, and the manager of the loan department has just presented a problem to you. He is unable to complete the APR calculation on an adjustable rate mortgage that a borrower applied for yesterday. The loan features initial payments based on a 5 percent rate of interest at loan closing. The current composite rate on the loan is 7 percent. Two discount points have been paid by the borrower. Any difference between borrower payments and the interest payment required at the composite rate will be accrued in the mortgage balance in the form of negative amortization. The mortgage amount desired by the borrower is $65,000 for a 30-year term.

Required - Determine the APR, assuming that the ARM is made with a 2 percent annual and 5 percent over-the-life interest rate cap.

Reference no: EM133133851

Questions Cloud

Compute the base-line and the adjusted rois : Further assume that this is possible without any increase in operating assets or controllable fixed costs. Compute the base-line and the adjusted ROIs
Impact of flexible length of the shift work : WHAT IS THE IMPACT OF FLEXIBLE LENGTH OF THE SHIFT WORK ON THE JOB AND LIFE SATISFACTION OF NURSING PROFESSIONALS
How much money does she need when she retires : a) How much money does she need when she retires at the age of 60? Be certain to include all her financial goals
How much verifiable monthly gross income : How much verifiable monthly gross income must the borrowers earn if the lender permits them to devote 29 percent of gross monthly income
Determine the apr : Required - Determine the APR, assuming that the ARM is made with a 2 percent annual and 5 percent over-the-life interest rate cap
What difference would you expect between choices : In the Traveler's Dilemma, each of two people chooses a number between 180 and 300. What difference would you expect between choices
What is the amount of the recapture or terminal loss : The Class 8 UCC balance on January 1, 2021 was $66,000. What is the amount of the recapture or terminal loss
What is the total amount of profit for your ibm investment : Two years ago, you purchased 166 shares of IBM stock for $131 a share. What is the total amount of profit for your IBM investment
What is burt maximum depreciation for the year : The recovery period for passenger autos is 5 years. What is Burt's maximum depreciation for the year 2021

Reviews

Write a Review

Accounting Basics Questions & Answers

  Compute the number of receivables from subsidiaries

Polychromasia, Inc. had a number of receivables from subsidiaries at the balance sheet date, as well as several payables to subsidiaries.

  What is the warranty Expense for Dec

Tyremart Inc provides a two-year warranty on winter tyres it manufactures below are the excerpts for Dec 2020 - What is the warranty Expense for Dec

  What was the amount of underapplied or overapplied overhead

woodgrain technology makes home office furniture from fine hardwoods. the company uses a job-order costing system and

  A company issued 10-year bonds with a par value of 20000000

a company issued 10-year bonds with a par value of 20000000 and an 8 annual face on january 1 2014. the market rate on

  Determine the present worth of a bond

Determine the present worth of a 4,5%, $5,000.00 bond with interest paid semiannually. The bond matures in 10 years and the investor desires to make 6% compound

  How much total assets represents permanent assets

How much of the $890,000 in total assets represents permanent assets and how much represents temporary assets

  What kind of leadership strategy

What kind of leadership strategy are you using if you address the concerns of your team by telling them that the reason you micromanage is that a few years

  What is the expected return on the loan

The customer is expected to draw down 80 percent of the commitment at the beginning of the year. a. What is the expected return on the loan without taking future values into consideration?

  Which stock do you think will have the higher price

Both stocks have just pay $2 dividend. Which stock do you think will have the higher price, a share of the preferred or a share of the common

  Calculate the net increase in cash for the year

Mayweather reports net income of $347,500 for the year ended December 31. Calculate the net increase in cash for the year

  What is balance of free or unrestricted retained earnings

Give the entries needed for the above information - What is the balance of the free or unrestricted retained earnings as of December 31

  Calculate the equivalent units of direct materials

South River Chemicals Pty Ltd. manufactures a product called Zybek. Direct materials are added at the beginning of the process and conversion activity occurs.

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