Suppose you purchase a home for $800,000. After providing a 20% down payment (or $160,000), you decide to go to your friendly, neighborhood bank to request a mortgage for the remaining balance. If you would like monthly payments over a 30-year amortization period and the bank is quoting 6% APR compounded semi-annually, answer the following:

• What is the total amount of the loan
  What is the Effective Annual Rate
  What is the Effective Periodic Rate
  What is the Monthly Mortgage Payment?
• What amount of the Monthly Mortgage Payment goes toward Interest on the  36th payment?
• What amount of the Monthly Mortgage Payment goes toward Principal on the 48th payment?
• How much Interest is Paid after 5 Years?
• How much Principal is Paid after 5 Years?
• An issue of common stock's most recent dividend is $1.75. Its growth rate is 5.7%. What is its price if the market's rate of return is 7.7%?

Answer rating: 100% (QA)

SOLUTION 1 Total amount of the loan Remaining balance Purchase Price Down Payment 8000... View the full answer