Ew monthly payment including principal and interest

Assignment Help Financial Management

Reference no: EM131825029

1. The Keller's discovered that they could reduce their mortgage interest rate from 10% to 4%. The value of homes in their neighborhood has been increasing at the rate of 5% annually. If the Keller's were to refinance their house with $3,000 in closing costs added to their current mortgage balance ($277,000) over a period of time which coincides with their chosen retirement age in 20 years, what would be their new monthly payment including principal and interest?

A. $1,672.99.

B. $1,678.56.

C. $1,691.11.

D. $1,696.74.

2. Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $156,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment?

a. 2.42%

b. 3.31%

c. 2.72%

d. 2.15%

e. 2.77%

Reference no: EM131825029

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