Determine what the payment schedule will be

Assignment Help Financial Management

Reference no: EM131044711

Your friend chose an ARM for the purchase of their new home. They would like to determine what the payment schedule will be. You decide to help and determine the following information to help you provide the answer. The contract rate is Prime – 0.75% where the current prime rate is 3.25%. The mortgage is a 15 year 1/1 ARM 3/2/5. Fees are $995 and there are no points. The purchase price of the home is $200,000 and the LTV of the mortgage is 80%. You expect that Prime will be

3.25% in Year 1

4.25% in Year 2

5.50% in Year 3

6.75% in Year 4

4.00% in Year 5

What is the monthly mortgage payment for each of the first 5 years?What is the amortization schedule for each of the first 5 years?

Reference no: EM131044711

Questions Cloud

Decision regarding the null hypothesis : Suppose a consumer product researcher wanted to find out whether a highlighter lasted less than the manufacturer's claim that their highlighters could write continuously for 14 hours. The researcher tested 40 highlighters and recorded the number o..

What is the required rate of return on the stock : Juggernaut Satellite Corporation earned $20.3 million for the fiscal year ending yesterday. The firm also paid out 30 percent of its earnings as dividends yesterday. The firm will continue to pay out 30 percent of its earnings as annual, end-of-year ..

Bond value and time-constant required returns : Bond value and time: Constant required returns. Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1,000-par bond that pays interest annually. The required return is currently 14%, and the company is certain it will remain at ..

How data will be collected in the case organization : SBM2101 Operation Management. Develop a research methodology to demonstrate how data will be collected in the case organization. Use the selected best practice model developed in assignment (conceptual model) as the basis to review the current ope..

Determine what the payment schedule will be : Your friend chose an ARM for the purchase of their new home. They would like to determine what the payment schedule will be. You decide to help and determine the following information to help you provide the answer. What is the monthly mortgage payme..

The only skills modern managers need are human skills : The only skills modern managers need are human skills. Discuss - Find an article related to above topic and discuss. Article should Current, Academic and Relevant

Expected returns and standard deviations of stocks : Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .081, E(RB) = .141, ?A = .351, and ?B = .611. Calculate the standard deviation of a portfolio with the same portfolio weights as in part (a) when the correlation coeff..

Find the value of a bond maturing : Find the value of a bond maturing in 4 years, with a $1,000 par value and a coupon interest rate of 11% (5.5% paid semi-annually) if the required return on similar-risk bonds is 14% annual interest (7% paid semi-annually).

Call option contracts with strike price-total net profit : You expected the Ali Baba stock price to rise over the next six months. Now, the current price is $90. To utilize your expectation, you bought 5 call option contracts with strike price of $91 on Ali Baba stock. The call option price is $6 per option...

User Account

All Pages