You wholly own a small house whose estimated current market value is $500,000. Now you plan to sell out the small house and buy a new and larger house whose value is $750,000. You want to borrow a 24-year $314000 home loan from the bank at an annual interest rate of 5.8% with monthly payments. 

Suppose that the bank's annual required return rate is 6.8%, what is the present value of the new mortgage loan?

Answer rating: 100% (QA)

To calculate the present value of the new mortgage loan we need to discount the future cash flows ... View the full answer