User Account

All Pages

What are the initial monthly payments on the loan

Assignment Help Finance Basics
Reference no: EM131734655

Question: Consider a $2 million, 30-year amortization ARM with monthly payments and annual interest adjustments. The initial interest rate is 6%. The index for the loan is one-year U.S. government bonds, currently yielding 5.5%. The loan has a margin of 250 basis points.

a. Is the loan's initial interest rate a teaser rate? How do you know?

b. If one-year T-bonds remain at 5.5%, what will be the applicable interest rate for this mortgage after the first year?

c. What are the initial monthly payments on this loan?

d. Assuming T-bonds remain at 5.5%, what will be the monthly payments after the first year?

e. Under that assumption (and assuming no discount points), what is the forecasted yield-tomaturity on this loan at the time it is issued, assuming it has no discount points?

Reference no: EM131734655

Questions Cloud

Creating venture success through entrepreneurship : Case Study Title: "Creating Venture Success through Entrepreneurship: The case of Latin American immigrant business owners in New York City"
Write a c program that accepts two command line parameters : Write a C program that accepts two command line parameters, the first one being the value of N (in decimal notation) and the second one being a virtual address.
Discuss a cultural behavior or tradition that was acceptable : A cultural behavior or tradition that was acceptable 50 years ago in our culture, but is now considered deviant today
What can be said of the net present value of first project : If both projects have the same total expected cash outflows, what can be said of the net present value of the first project compared with that of second project
What are the initial monthly payments on the loan : Consider a $2 million, 30-year amortization ARM with monthly payments and annual interest adjustments. The initial interest rate is 6%.
Hierarchical modeling can best be described : Hierarchical modeling can best be described as:
Define push-down accounting and bargain acquisitions : Push-Down Accounting and Bargain Acquisitions, The accounting profession has engendered much debate on the pros and cons of push- down accounting
Ethics and professionalism in accounting and auditing : Topic: Specific Professional Standard - You are to perform research on the subject of ethics and professionalism in accounting and auditing
Describe the key segmentation principles : Describe the marketing mix components in detail. How does a firm create, communicate and deliver value? Describe the key segmentation principles.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd