What is the monthly payment on the mortgage

Assignment Help Finance Basics
Reference no: EM133665318

Problem

Sherry and Sam want to purchase a condo on the beach. They will spend $650,000 on the condo and are taking out a loan for the condo for 20 years at 7.0% interest.

A. What is the monthly payment on the mortgage? Construct the amortization of the loan for the 20 years in Excel to show the monthly interest costs, the principal reduction, and the ending balance for each month.

B. Then change the amortization to reflect that after 10 years, Sherry and Sam will increase their monthly payment to $7500 per month (in a spreadsheet). When will they fully repay the mortgage with this increased payment if they apply all the extra dollars above the original payment to the principal?

Reference no: EM133665318

Questions Cloud

How would you explain systems thinking : How would you explain systems thinking and its impact on an organization? Let us say that you have just taken on the role of District Manager
Create a report summarizing the competitor analysis : Create a report summarizing the competitor analysis for three of the best performing organizations in the life sciences industry, focusing on pharmaceuticals
Describe gertrude ederles historic accomplishment : Describe Gertrude Ederle's historic accomplishment. What contributions did Annie Jump Cannon make to the field of astronomy?
Defining imperialism : In your own words, provide a definition for the term imperialism that addresses the four different arguments about the causes and values of imperialism.
What is the monthly payment on the mortgage : What is the monthly payment on the mortgage? Construct the amortization of the loan for the 20 years in Excel to show the monthly interest costs.
How much would you be willing to pay for an investment : Assuming a required return of 5.5%, how much would you be willing to pay for an investment that pays you and your heirs $50,000 per year in perpetuity?
How many years will it take you to reach a balance : If you earn a compound annual rate of return of 5%, how many years will it take you to reach a balance of $500,000?
What is the current stock price : The dividend is expected to grow at 24.00% per year for 2 years and then the growth rate will slow to 3.70% per year forever. What is the current stock price?
How much will the accumulated value three years after change : At that time the interest rate is changed to 19.8% compounded monthly how much will the accumulated value be 3 year's after the change?

Reviews

Write a Review

Finance Basics Questions & Answers

  Projects irrs at these same costs of capital

What are the two projects' IRRs at these same costs of capital?

  Calculate the ratio of exchange in market price

Calculate the ratio of exchange in market price. Calculate the earnings per share (EPS) and price/earnings (P/E) ratio for each company.

  What is the implied value of the warrants attached

Neubert also has outstanding $1,000 par value 15-year straight debt with a 7% coupon paid annually, also trading for $1,000. What is the implied value of the warrants attached to each bond?

  Computing portfolio beta

A stock portfolio invested 35% in Stock Q, 25% in Stock R, 30% in Stock S, and 10% in Stock T. The betas for these 4 stocks are .84, 1.17, 1.11 and 1.36 respectively. Compute the portfolio beta?

  Determine fund required rate of return

Suppose you manage a $3.98 million fund that consists of four stocks with the following investments: Stock Investment Beta A $260,000 1.50 B 650,000 -0.50 C 1,220,000 1.25 D 1,850,000 0.75 If the market's required rate of return is 12% and the ris..

  What is the standard deviation of this portfolio expressed

The average covariance between the assets is 0.118. What is the standard deviation of this portfolio expressed as a percentage to three decimal places?

  A bank issues a $100,000 fixed-rate 30-year mortgage

A bank issues a $100,000 fixed-rate 30-year mortgage with a nominal annual rate of 4.5%. If the required rate drops to 4.0% immediately after the mortgage is issued, what is the impact on the value of the mortgage? Include the dollar amount and perce..

  What is the value of fabulous farah fancy footwear bond

Fabulous Farah's Fancy Footwear (4F) has $1,000 face value bonds outstanding with a 10% coupon rate; the coupon payments are made quarterly.

  Find out the dollar amount of the daily value at risk

1) Given this information, what would be the dollar amount of the Daily 5% Value at Risk (VaR) for your investment rounded to the nearest dollar?

  Select beneficial option for client

Company A currently purchase CDs from many Vendors at various rates per pack. They do not have guaranteed orders with any vendors, and are planning to make consolidated order and reduce overall price.

  Effective strategy for high-income investors

Problem: As a financial manager, to what extent would market timing be an effective strategy for high-income investors? Retirees? Explain your responses.

  What is the value of the bank stock

What is the value of the bank's stock? Use the free cash flow to equity model to value this stock. Do not round intermediate calculations.

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