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

Central bank - banking institutions, Central Bank - Banking Institutions ...

Central Bank - Banking Institutions This is a bank which is entrusted along with the responsibility of keeping economic stability and financial soundness of a country.  Theref

Maturity on the bond, You buy a SML Bond for $980.  The bond has a face val...

You buy a SML Bond for $980.  The bond has a face value of $1000 and an yearly  coupon rate of 8%.  There are five years left until maturity. a. What is the yield to maturity on

Computing the real rate & flat tax, Quetion1: You are earning 5.2 percent ...

Quetion1: You are earning 5.2 percent on a certificate of deposit. Inflation is running 3.5 percent. What is the real rate of return on your investment? Question2: Search for

Lock-box system, Lock-Box System In a lock-box system, the customer se...

Lock-Box System In a lock-box system, the customer sent the payments to a post office box. The post office box is emptied with the firm's bank at minimum once or twice all bus

Please help!!, The following information pertains to Fairways Driving Range...

The following information pertains to Fairways Driving Range, Inc.: The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they will

Accounts payable turnover ratio, Accounts Payable Turnover Ratio Ratio...

Accounts Payable Turnover Ratio Ratio for Account Payable Turnover is as Follow: Creditors/accounts payable turnover = Annual credit purchases /Average creditors

Agency theory, Agency Theory An agency relationship arises whether on...

Agency Theory An agency relationship arises whether one or more parties identified the principal contracts or hires another identified an agent to perform on his behalf some

Interpolation method, Interpolation method Consequently, r denote...

Interpolation method Consequently, r denotes required rate of return Consequently, r = 14 percent + (15 percent - 14 percent) x 253 .646 /253 .646 + 5.375

Overdraft finance, Overdraft Finance This finance is perfect to need a...

Overdraft Finance This finance is perfect to need as bridging finance in sense such should be required to solve the company's short term liquidity problems in specific those o

Determine the classification of new issue market, Classification of New Iss...

Classification of New Issue Market New market can be classified as: (i) A market where firms go to public for the first time through initial public offering (IPO). (ii

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