Marina wants to take out a $500,000 loan to purchase a new home. The bank offers a
Question:
Marina wants to take out a $500,000 loan to purchase a new home. The bank offers a 25-year loan with an APR of 3.8%. If she purchases 1 point for 1% of the value of the loan, she will reduce her APR by 0.3%.
a. What is her monthly savings with the point purchase?
b. When will she break even?
c. Assume she decided not to buy the point and put the cost into a certificate of deposit that pays 1.5% interest compounded monthly. Would this have been a better way to use the cost of the points? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a Her monthly savings with the point purchase 10 03 x 1000 28556 b ...View the full answer
Answered By
Brian Otieno
I'm Brian , an experienced professional freelancer with countless hours of success in freelancing many subjects in different disciplines. Specifically, I have handled many subjects and excelled in many disciplines. I have worked on many Computer Science projects and have been able to achieve a lot in that field. Additionally, I have handled other disciplines like History, Humanities, Social Sciences, Political science, Health care and life science, and Religion / Theology. My experience generally in these subjects has made me able to deliver high-quality projects in a very timely fashion. I am very reliable at my job and will get the work done in time, no matter what. In Addition, I have managed to ensure that the work meets my client's expectations and does not cause an error. I am a hard-working and diligent person who is highly responsible for everything I do. Generally, Freelancing has made me more accountable for doing my job. Additionally, I have had a passion for writing for the last seven years in this field.
0 Reviews
10+ Question Solved
Related Book For 
Financial Algebra Advanced Algebra With Financial Applications
ISBN: 9781337271790
2nd Edition
Authors: Robert Gerver, Richard J. Sgroi
Question Posted:
