Question: Suppose you take out a $ 1 0 0 , 0 0 0 , 2 0 - year mortgage loan to buy a condo. The
Suppose you take out a $year mortgage loan to buy a condo. The interest rate on the loan is To keep things simple, we will assume you make payments on the loan annually at the end of each year.
a What is your annual payment on the loan? Do not round intermediate calculations. Round your answer to decimal places.
b Construct a mortgage amortization. Do not round intermediate calculations. Round your answers to decimal places.
c What fraction of your initial loan payment is interest? Do not round intermediate calculations. Enter your answers as a whole percent.
d What fraction of your initial loan payment is amortization? Do not round intermediate calculations. Enter your answers as a whole percent.
e What fraction of the loan has been paid off after years halfway through the life of the loanDo not round intermediate calculations. Round your answer to decimal places.
f If the inflation rate is what is the real value of the first yearend payment? Do not round intermediate calculations. Round your answer to decimal places.
g If the inflation rate is what is the real value of the last yearend payment? Do not round intermediate calculations. Round your answer to decimal places.
h Now assume the inflation rate is and the real interest rate on the loan is unchanged. What must be the new nominal interest rate? Do not round intermediate calculations. Enter your answers as a whole percent.
i Recompute the amortization table. Do not round intermediate calculations. Round your answers to decimal places.
i What is the real value of the first yearend payment in this highinflation scenario? Do not round intermediate calculations. Round your answer to decimal places.
j What is the real value of the last payment in this highinflation scenario? Do not round intermediate calculations. Round your answer to decimal places. Please get this right! I can't afford for this to be wrong.
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