Suppose you purchase a house for $550,000 and make a down payment of 21% of the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose you purchase a house for $550,000 and make a down payment of 21% of the purchase price. The balance is amortized over 20 years The house mortgage agreement is subject to 3.4513% compounded semi-annually for the first four years and requires equal monthly payments. - What is the size of the equal monthly payments for the first four years? - What is the house mortgage balance at the end of the four years? Perform this calculation using Excel, without an amortization schedule. After four years, the house mortgage is refinanced at a reduced nominal rate of 3.1542% compounded semi-annually and the house mortgage is amortized over the remainder of the term - What is the size of the new mortgage payments for the remainder of the term? - What is the size of the final loan payment? Perform this calculation in Excel, without an amortization schedule. Prepare one complete amortization schedule showing the mortgage amortized over the full 20-year period (reflecting the change in payment size). Cell reference values appropriately. ROUND all monetary values to the nearest cent. Express only the totals as currency Highlight the calculated payment for the first four years and the first payment on the amortization schedule using one colour. Highlight the new payment and the first new payment on the amortization schedule with a second colour Perform checks of your calculated values compared to the amortization schedule values. - Highlight the calculated principal balance of the loan after four years and the balance shown in the amortization schedule using a third colour. - Highlight the calculated final loan payment and the amortization schedule final payment using a fourth colour. Use the amortization schedule value directly to answer this question: What would be the total cost of financing your house mortgage assuming that the rate did change after four years, as detailed above? Highlight the statement and the amortization schedule value using a fifth colour Suppose you purchase a house for $550,000 and make a down payment of 21% of the purchase price. The balance is amortized over 20 years The house mortgage agreement is subject to 3.4513% compounded semi-annually for the first four years and requires equal monthly payments. - What is the size of the equal monthly payments for the first four years? - What is the house mortgage balance at the end of the four years? Perform this calculation using Excel, without an amortization schedule. After four years, the house mortgage is refinanced at a reduced nominal rate of 3.1542% compounded semi-annually and the house mortgage is amortized over the remainder of the term - What is the size of the new mortgage payments for the remainder of the term? - What is the size of the final loan payment? Perform this calculation in Excel, without an amortization schedule. Prepare one complete amortization schedule showing the mortgage amortized over the full 20-year period (reflecting the change in payment size). Cell reference values appropriately. ROUND all monetary values to the nearest cent. Express only the totals as currency Highlight the calculated payment for the first four years and the first payment on the amortization schedule using one colour. Highlight the new payment and the first new payment on the amortization schedule with a second colour Perform checks of your calculated values compared to the amortization schedule values. - Highlight the calculated principal balance of the loan after four years and the balance shown in the amortization schedule using a third colour. - Highlight the calculated final loan payment and the amortization schedule final payment using a fourth colour. Use the amortization schedule value directly to answer this question: What would be the total cost of financing your house mortgage assuming that the rate did change after four years, as detailed above? Highlight the statement and the amortization schedule value using a fifth colour
Expert Answer:
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0133052312
10th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, K. Suzanne Coombs
Posted Date:
Students also viewed these finance questions
-
in regards to the document bob drew 18000 in 2022 where Jim and stan only drew 14400 -- how does the extra bob drew affect his taxable income
-
University Car Wash purchased new soap dispensing equipment that cost $261,000 including installation. The company estimates that the equipment will have a residual value of $27,000. University Car...
-
A variable-rate mortgage of $150 000 is amortized over 20 years by equal monthly payments. After 18 months the original interest rate of 6% compounded semiannually was raised to 6.6% compounded...
-
Four wooden beams, each of length 2a, are nailed together at their midpoints to form the support system shown. Assuming that only vertical forces are exerted at the connections, determine the...
-
Explain the importance to managers of each of these organizing concepts or principles: a. Unity of direction b. Chain of command c. Line and staff departments d. Unity of command e. Delegation of...
-
Consider the circuit shown in FIGURE 21-47. Find the current through each resistor using (a) The rules for series and parallel resistors and (b) Kirchhoff's rules. Figure 21-47, B 6.20 7.5 0 15 V 120...
-
Larry Lair has recently been promoted to production manager, and so he has just Explain the production cost started to receive various managerial reports. One of the reports he has received is the...
-
Use truth tables to determine whether the following pairs of symbolized statements are logically equivalent, contradictory, consistent, or inconsistent. First, determine whether the pairs of...
-
Ducat Company has 2,000 outstanding shares and a Price/Earnings (P/E) ratio of 11.44. During the year Ducat reported cost of goods sold for $206850 and on average charged a 20% mark up. Assume a 365...
-
A p-doped wafer (boron concentration of 5 E17/cm^3) that is 200 m thick completely and homogenously absorbs a beam of photons, generating 2E19 excess free electrons (n) per cubic centimetre and per...
-
*Give at least 2 strategies and 2 concrete examples to manage shortages of employees in a multinational organization Identify a global company you know which has adopted these strategies. *Give 2...
-
Rob is saving for retirement immediately and wants to retire in 43 years. He will make an annual contribution into his retirement account. The contribution will be made at the end of each year. He...
-
A) How would you define value creating growth? B)Why is value creating growth difficult to accomplish? Be very specific.
-
HighTech Ltd's beta is 1.35. If the risk free rate is 5.1% and the market risk premium is 7.3% what is the expected return investors require from HighTech?
-
You have completed the Learning Materials on Economics (Module 11) You have read this week's Course Reading: Bittman, M. (2014, Jul. 15). "The true cost of a burger." New York Times. Deliverables...
-
On October 4 th , 2000, long distance company, EarthCOM, issued bonds to finance a new wireless product. The bonds were issued for 30 years (mature on October 4 th , 2030), with a face value of...
-
You select a random sample of 350 customer orders for an audit and find that 8 orders were not shipped on time. What is the sample proportion of orders not shipped on time? Give answer in decimal...
-
How do the principles of (a) Physical controls and (b) Documentation controls apply to cash disbursements?
-
Is the effect of expropriation a result of market inefficiency?
-
Can a good financing plan make up for a mediocre investment?
-
A company is in trouble as a result of low profits and excessive debts. (a) Do you think that the creditors and the shareholders have the same concerns? More specifically, in the event of the...
Study smarter with the SolutionInn App