Origination and processing fee

Assignment Help Business Economics
Reference no: EM131806947

A home mortgage with monthly payments for 30 years is available at 6% interest. The home you are buying costs $120,000, and you have saved $12,000 to meet the requirement for a 10% down payment. The lender charges "points" of 2% of the loan value as a loan origination and processing fee. This fee is added to the initial balance of the loan.

(a) What is your monthly payment?

(b) If you keep the mortgage until it is paid off in 30 years, what is your effective annual interest rate?

(c) If you move to a larger house in 10 years and pay off the loan, what is your effective annual interest rate?

(d) If you are transferred in 3 years and pay off the loan, what is your effective annual interest rate?

Reference no: EM131806947

Questions Cloud

What is the present worth of the winnings : A lottery pays the winner $1 million, in 20 equal payments of $50,000. The payments are received at the end of the year, and the winner's interest rate is 12%.
What is the interest rate you would pay by financing : The salesman is willing to cut the price by 10% if you pay cash. What is the interest rate you would pay by financing?
What will be the journal entry for the issuance : Prepare the journal entry for the issuance when only the market price of the common stock is known and it is $212 per share.
What is the present worth of the coverage : Creek side Engineering will pay $24,000 per year for errors and omissions liability insurance. What is the present worth of the coverage for 10 years?
Origination and processing fee : The lender charges "points" of 2% of the loan value as a loan origination and processing fee. This fee is added to the initial balance of the loan.
How many units does samantha need to sell to breakeven : How many units does Samantha need to sell to breakeven
What rate of return did she receive on her investment : At the end of 4 years, she sold the lot for a net value of $15,000. What rate of return did she receive on her investment?
What is the pw of the repair expenses : Mate Construction has purchased some earthmoving equipment that comes with a 2-year warranty. Repair costs are expected to be $1500 per year.
Create a definition of coding accuracy : Create a definition of coding accuracy in your own words and two examples of how inaccurate coding might impact billing or reimbursement for the facility

Reviews

Write a Review

Business Economics Questions & Answers

  What other factors do you think affect tuition elasticity

A 1998 study indicated that the price elasticity of demand for four-year university was .67. Using this estimate, how would a 10% increase in tuition at a four-year university change expected enrollments? Do you think the price elasticity of demand w..

  What combination of monetary and oscar policy

A small open economy with a aborting exchange rate is in recession with balanced trade. If policymakers want to reach full employment while maintaining balanced trade, what combination of monetary and Oscar policy should they choose?

  Draw the average and marginal revenue curves

Draw the average and marginal revenue curves and the average and marginal cost curves. What are the monopolist’s prot-maximizing price and quantity? What is the resulting prot? Calculate the firm’s degree of monopoly power using the Lerner index.

  Principal-agent and principal principal conflicts

1. Briefly, explain the role of managers in both Principal - Agent and Principal - Principal conflicts.

  What is the opportunity cost of producing more units

If a country is currently producing 11 units of health care and 16 units of education, what is the opportunity cost of producing 5 more units of education?

  Goal of maximizing revenues and profits

From the perspective of a manufacturer (producing a product of your choice) operating with the goal of maximizing revenues and profits, outline strategies for succeeding at this goal under each of the four market forms:

  Choose moral objectivism over subjectivism

Why would you choose moral objectivism over subjectivism? What is the difference between the two and what influenced your decision?

  Five values for different types of elasticity

Here are five values for different types of elasticity. (The numbers have been calculated for each case/market using the elasticity methods from your textbook).

  Which policy do you believe would be more effective

Which policy do you believe would be more effective in the short term for accomplishing these goals.

  Competitive market environment is deadweight losses

One of the problems in a competitive market environment is deadweight losses. What are deadweight losses, and what are their causes? What are the market effects of a deadweight loss? What are the major factors that determine who will bear the burden ..

  Maximize payoff

If Professor P chooses x and s to maximize her utility subject to the constraint that Mr. A is willing to work.

  Regarding citizenship status of senator ted cruz of texas

After your review of the United States Constitution, and in consideration of the controversy amongst Republican party Presidential nominees regarding the citizenship status of Senator Ted Cruz of Texas, is he indeed eligible to run for President of t..

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