19 A partially amortizing loan for $90,000 for 10 years is made at 6 percent interest. The lender and borrower agree that payments will be monthly and that a balance of $20,000 will remain and be repaid at the end of year 10. 1.66 points Required: a. Assuming 2 points are charged by the lender, what will be the yield if the loan is repaid at the end of year 10? !l b. What will be the loan balance at the end of year 4? eBook c. What will be the yield to the lender if the loan is repaid at the end of year 4? Note: For all requirements, do not round intermediate calculations, round Loan balance to the nearest whole dollar. . round annual yields to 2 decimal places. Ask - b. Loan balance prin b.Losnbalance | c. Annual yield C References 20 1.66 points Skipped eBook Ask - Print D References A loan for $50,000 is made for 10 years at 8 percent interest and no monthly payments are scheduled (assuming monthly compounding). Required: a. How much will be due at the end of 10 years? b. What will be the yield to the lender if it is repaid after eight years? c. If1 point is charged to the yield, what will be the new yield to the lender? Complete this question by entering your answers in the tabs below. Required A Required B Required C If 1 point is charged to the yield, what will be the new yield to the lender? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Aalyed [ % 21 1.66 points Skipped eBook Ask - Print C References John wants to buy a property for $105,000 and wants an 80 percent loan for $84,000. A lender indicates that a fully amortizing loan can be obtained for 30 years (360 months) at 6 percent interest; however, a loan fee of $3,500 will also be necessary for John to obtain the loan. Required: a. How much will the lender actually disburse at closing? b. What is the APR for the borrower, assuming that the mortgage is paid off after 30 years (full term)? c. If John pays off the loan after five years, what is the effective interest rate? d. Assume the lender also imposes a prepayment penalty of 2 percent of the outstanding loan balance if the loan is repaid within eight years of closing. If John repays the loan after five years with the prepayment penalty, what is the effective interest rate? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D How much will the lender actually disburse at closing? Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. Omursament [ 22 1.66 points Skipped eBook Ask - Print C References A lender is considering what terms to allow on a loan. Current market terms are 9 percent interest for 25 years for a fully amortizing loan. The borrower, Rich, has requested a loan of $100,000. The lender believes that extra credit analysis and careful loan control will have to be exercised because Rich has never borrowed such a large sum before. In addition, the lender expects that market rates will move upward very soon, perhaps even before the loan is closed. To be on the safe side, the lender decides to extend to Rich a CPM loan commitment for $95,000 at 9 percent interest for 25 years; however, the lender wants to charge a loan origination fee to make the mortgage loan yield 10 percent. Required: a. What origination fee should the lender charge? b. What fee should be charged if it is expected that the loan will be repaid after 10 years? Note: For all requirements, do not round intermediate calculations and round your final answers to the nearest whole dollar. a. Loan origination fee - 25 year loan b. Loan origination fee - 10 year loan Assessment Tool iFrame 23 A borrower is faced with choosing between two loans. Loan A is available for $75,000 at 6 percent interest for 30 years, with 6 points to be included in closing costs. Loan B would be made for the same amount, but for 7 percent interest for 1.66 30 years, with 2 points to be included in the closing costs. Both loans will be fully amortizing. points Required: !l a. Ifthe loan is repaid after 20 years, what is the effective interest rate for Loan A and Loan B? eBook b. If the loan is expected to be repaid after five years, what is the effective interest rate for Loan A and Loan B? , Complete this question by entering your answers in the tabs below. Ask h=a Required A Required B Print If the loan is repaid after 20 years, what is the effective interest rate for Loan A and Loan B? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Assessment Tool iFrame ;LT |- I References Effective interest rate _ % _ % 24 1.66 points Skipped eBook Ask - Print C References A basic ARM is made for $200,000 at an initial interest rate of 6 percent for 30 years with an annual reset date. The borrower believes that the interest rate at the beginning of year (BOY) 2 will increase to 7 percent. Required: a. Assuming that a fully amortizing loan is made, what will the monthly payments be during year 17 b. Based on (&) what will the loan balance be at the end of year (EOY) 1? C. d. e Given that the interest rate is expected to be 7 percent at the beginning of year 2, what will the monthly payments be during year 27 What will be the loan balance at the EOY 27 What would be the monthly payments in year 1if they are to be interest only? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E What would be the monthly payments in year 1 if they are to be interest only? Note: Do not round intermediate calculations. Round your final answer to the nea Monthly payment for year 1 l | 25 An ARM for $100,000 is made at a time when the expected start rate is 5 percent. The loan will be made with a teaser rate of 2 percent for the first year, after which the rate will be reset. The loan is fully amortizing, has a maturity of 25 1.66 years, and payments will be made monthly. points Required: !l a. What will be the payments during the first year? eBook b. Assuming that the reset rate is 6 percent at the beginning of year (BOY) 2, what will the payments be? c. By what percentage will the monthly payments increase? d. If the reset date is three years after loan origination and the reset rate is 6 percent, what will the loan payments be ' beginning in year 4 through year 257 Ask fp Complete this question by entering your answers in the tabs below. Print [[__. Required A Required B Required C Required D References What will be the payments during the first year? Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. Monthly payment during year 1 l |