For Problems 6-11, assume you buy a home and borrow $150,000 at 4.96% for 30 years....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
For Problems 6-11, assume you buy a home and borrow $150,000 at 4.96% for 30 years. You pay a total of $7,825 for origination fee, points, and mortgage insurance. In addition, you pay other loan costs of $1,685. You pay the first year's hazard insurance premium of $475 and are required to deposit $380 into an escrow account. 6. 7. 8. What is the reportable APR? What is your real APR, assuming the loan is not paid off early? Without calculating a precise APR, decide if, by prepaying the loan, your APR will be more or less than the APR found in Problem 7. 9. Assume you will pay off the loan at the end of 8 years. What is your real APR, reflecting the early payoff? For Problems 6-11, assume you buy a home and borrow $150,000 at 4.96% for 30 years. You pay a total of $7,825 for origination fee, points, and mortgage insurance. In addition, you pay other loan costs of $1,685. You pay the first year's hazard insurance premium of $475 and are required to deposit $380 into an escrow account. 6. 7. 8. What is the reportable APR? What is your real APR, assuming the loan is not paid off early? Without calculating a precise APR, decide if, by prepaying the loan, your APR will be more or less than the APR found in Problem 7. 9. Assume you will pay off the loan at the end of 8 years. What is your real APR, reflecting the early payoff?
Expert Answer:
Related Book For
Personal Finance Turning Money into Wealth
ISBN: 978-0134730363
8th edition
Authors: Arthur J. Keown
Posted Date:
Students also viewed these finance questions
-
Assume you buy a 20-year, $1,000 par value zero-coupon bond that provides a 10 percent yield. Almost immediately after you buy the bond, yields go down to 8 percent. a. What will be your gain on the...
-
Suppose you buy a home and borrow $148,000 using a 30 year mortgage with an annual interest rate of 3.00% (compounded monthly). You recall your FI 302 professor talking about how increasing your...
-
Suppose, as in the previous problem, you buy a home for $400,000 with a down payment of $100,000 and take out a mortgage for the remainder. Over the next three years, the price of the home rises to...
-
A strain relaxation test and a creep test are being conducted on a mouse Achilles tendon. If a strain of \epsi 0 = 60% is applied in the strain relaxation test and a stress of \ sigma 0 = 1 MPa is...
-
You're trying to save to buy a new $190,000 Ferrari. You have $40,000 today that can be invested at your bank. The bank pays 4.8 percent annual interest on its accounts. How long will it be before...
-
The Colorado Symphony Orchestra (CSO) was formed after the Denver Symphony was no longer financially viable. CSOs corporate charter requires that it cannot have an operating deficit in any year....
-
Light consisting of \(2.7 \mathrm{eV}\) photons is incident on a piece of potassium, which has a work function of \(2.3 \mathrm{eV}\). What is the maximum kinetic energy of the ejected electrons? A....
-
Larry and Jessica form the L&J Partnership. Larry contributes property with an adjusted basis of $70,000, a fair market value of $200,000, and subject to a liability of $80,000 in exchange for a 40...
-
1. Using the Black-Scholes model compute the value of a European call option on a non- dividend paying stock with an exercise price of $40 and an expiration date 6 months from now when the stock...
-
Online Security Buddies provides consulting services to small businesses that require computer security but are too small to have their own IT person on staff. The business had the following account...
-
A broker arranges an interest only mortgage with a face value of $500,000 between a borrower and a bank. The mortgage has a quoted rate of 5% per annum compounded semi-annually with monthly payments...
-
Clare is an aesthetic working in a beauty salon who earns 40% commission of her total. In one week she totaled $1250 in sales and $153 in gratuities calculate her total earnings for that week. Show...
-
A company manufactures two products, X and Y . The annual demand for product X is 1 0 , 0 0 0 units, while for product Y , it's 1 5 , 0 0 0 units. The setup cost for production is $ 5 0 0 , and the...
-
Kate wants to buy a 2,400 square foot house with an asking price of $238,500. She found three similar homes in the area. One was a 2,500 square foot home with an asking price of $225,000, another was...
-
Mark wants to improve his overall health and reaching out for help. What stage of Mark is currently in?
-
After Page 419 1. Assuming the judicial requirements are met, determine whether the following transactions qualify as a Type C reorganization: a) Target Corporation ("T") has $70,000 of operating...
-
What is the value of a 10-year, 7.5%, $10,000 par value bond paid semi-annually if its required rate of return is 12%? (30 Points) 1. 2. the first year of ownership? Explain. (30 Points) What are the...
-
Use multiplication or division of power series to find the first three nonzero terms in the Maclaurin series for each function. y = e x2 cos x
-
Calculate the after-tax return of a 4.65 percent, 20-year, A-rated corporate bond for an investor in the 10 percent marginal tax bracket. Compare this yield to that of a 3.25 percent, 20-year,...
-
Calculate the future value of $5,000 earning 5 percent after 1 year, assuming annual compounding. Now, calculate the future value of $5,000 earning 5 percent after 20 years
-
Consider three investors who need to partially liquidate investments to raise cash. In this case, all investments have been held for 3 or more years. Investor A waited for a $1,500 qualified dividend...
-
On January 1, 2015, Meredith Corporation purchased 25% of the ordinary shares of Pirates Company for 200,000. During the year, Pirates earned net income of 80,000 and paid dividends of 20,000....
-
On January 2, 2015, Parton Company issues a 5-year, $10,000,000 note at LIBOR, with interest paid annually. The variable rate is reset at the end of each year. The LIBOR rate for the first year is...
-
Komissarov Company has a debt investment in the bonds issued by Keune Inc. The bonds were purchased at par for 400,000 and, at the end of 2015, have a remaining life of 3 years with annual interest...
Study smarter with the SolutionInn App