Question
Suppose you are a lender being asked to supply a mortgage loan with monthly payments of $1,500 for 30 years or 360 months. Suppose also,
Suppose you are a lender being asked to supply a mortgage loan with monthly payments of $1,500 for 30 years or 360 months. Suppose also, that you currently receive interest on loans of similar risk at 6 percent or 0.5 percent per month.
| N | I | PV | PMT | FV |
| 360 | 0.5 | ? | (-)1500 | 0 |
PV=?
1) What payment would you require on this loan?
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To determine the loan amount we can use the present value formula PV PMT 1 1 rn r where PV is the ...
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Quantitative Methods For Business
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam
12th Edition
840062338, 840062346, 9780840062338, 978-0840062345
