CH 4 Problems, Finance Basics

Assignment Help:
Homework Chapter 4
A mortgage loan in the amount of $100,000 is made at 12% interest for 20 years. Payments are to be monthly in each part of this problem.
a. What will monthly payments be if:
1. The loan is fully amortizing?
2. It is partially amortizing and a balloon payment of $50,000 is scheduled at the end of year 20?
3. It is a nonamortizing or interest only loan?
4. It is a negative amortizing loan and the loan balance will be $150,000 at the end of year 20?
b. What will the loan balance be at the end of year 5 under parts a (1) through a (4)?
c. What would be the interest portion of the payment scheduled for payment at the end of month 61 for each case (1) through (4) above?
d. Assume that the lender charges 3 points to close the loans in parts a (1) through a (4). What would be the APR for each?
e. If the loan is prepaid at the end of year 5, what will be the effective rate of interest for each loan in parts a (1) through a (4)?

Related Discussions:- CH 4 Problems

Find out operating leverage, (i) Find out operating leverage from the follo...

(i) Find out operating leverage from the following data: Sales                             Rs.50000 Variable Cost               60% Fixed Cost                   Rs.12000

What is debt-equity ratio, Louis Futon Co. is currently an all-equity firm....

Louis Futon Co. is currently an all-equity firm. The current market value of the company is $80 million. The corporate tax rate is 35%. What is the new value of the company if Loui

Buying shares of a company, Buying Shares of a Company Factors should ...

Buying Shares of a Company Factors should be refer when Buying Shares of a Company 1. Economic situation of the country and other non-economic factors as like unfavorable c

Effective reach and effective frequency-insurance , Before purchasing insur...

Before purchasing insurance we have to go through different factors. Among different important factors there are two most crucial aspects we should consider before buying insurance

Disadvantages of floatation of new shares, Disadvantages of Floatation of N...

Disadvantages of Floatation of New Shares 1. The cost of getting a quotation is high, mainly when a new issue of shares is completed and the company is small. It means that su

Commercial bank for short term loans, Commercial Bank for Short Term Loans ...

Commercial Bank for Short Term Loans Purpose Why Commercial Banks Prefer To Lend Short Term Loans a) Long-term forecasts are not only difficult although also vague as unc

Factors of capital structure, Factors of Capital Structure 1. Availab...

Factors of Capital Structure 1. Availability of securities - This influences the company's employ of debt finance that means such if a company has enough securities, so then

Foreign credit insurance association (fcia), Foreign Credit Insurance Assoc...

Foreign Credit Insurance Association (FCIA) An agent of the Export/Import Bank, FCIA gives exporters with insurance coverage beside both commercial and political risk. The main

Development banks and financial institutions, Development Banks and Financi...

Development Banks and Financial Institutions There are some sectors in the economy such may not secure adequate funds from commercial banks for different motives. a) May re

What does beta measure and how is it interpreted, The Beta of several indus...

The Beta of several industry sectors is shown below. Industry                                                                                            Beta (β) Banks

Write Your Message!

Captcha
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