Wealthy professor would like to live in golfing community

Assignment Help Business Economics

Reference no: EM131011390

Your wealthy professor would like to live in a golfing community. A house is for sale in Greenbryer. The purchase price is $899,900. Assume that your professor is willing to pay the full asking price. The bank loves to make loans to professors and has given the following terms: 3.5% APR compounded quarterly, 15% down payment, a term of 5 years, monthly payments, and an amortization period of 25 years. Assume there are no other fees.

How much is the initial mortgage principal?

How much would the mortgage payments be?

Is this mortgage conventional? Why?

Reference no: EM131011390

Questions Cloud

Proportion of cash flow value depends on terminal value : A project’s annual (operating) cash flows for the next five years are $1.2 million, $1.4 million, $1.7 million, $2 million, and $2.5 million. Assuming a discount rate of 15% and a terminal growth rate of 4%, answer the following questions. a. What is..

Net working capital even further inventory financing scheme : Currently, a firm has $30 million in cash, $20 million in accounts receivable, $45 million worth of inventory, and $10 million in taxes payable. If the firm decided to go with a just-in-time inventory process that reduced the current inventory to $5 ..

Building is expected to generate no cash flows : A building is expected to generate no cash flows for several years and then generate annual cash flows forever. What is the value of the building if the first annual cash flow is expected in 6 years from today, the first annual cash flow is expected ..

Wealthy professor would like to live in golfing community : Your wealthy professor would like to live in a golfing community. A house is for sale in Greenbryer. The purchase price is $899,900. Assume that your professor is willing to pay the full asking price. The bank loves to make loans to professors and ha..

Calculate the variance of portfolio returns : Hyacinth Macaw invests 62% of her funds in stock I and the balance in stock J. The standard deviation of returns on I is 14%, and on J it is 26%. a. Calculate the variance of portfolio returns, assuming the correlation between the returns is 1.0. (Do..

Flora accounting services completed these transactions : Prepare General journal (using a talbe with professional terms for debit/credit entries such as Cash, Account Receivable or Payable) to record the above transactions.

What is the quarterly interest rate on the loan : Celeste just borrowed 44,400 dollars. She plans to repay this loan by making equal quarterly payments of 2,730.19 dollars for 25 quarters. If she makes her first quarterly payment later today, then what is the quarterly interest rate on the loan? Ans..

What is the value of an investment that will pay investors : What is the value of an investment that will pay investors 2,980 dollars per year for 7 years and will also pay investors an additional 4,970 dollars in 1 year(s) from today if the expected return for the investment is 7.45 percent per year and the f..

User Account

All Pages