The current 10-year bond offers a 2.75% in yield. The real rate as shown by 10 year
Question:
The current 10-year bond offers a 2.75% in yield. The real rate as shown by 10 –year inflation adjusted bonds is 0.95%.
Calculate the expected inflation. Be precise in your approach.
You would like to borrow $185,000 over 30 years at 4.5% interest.
Calculate the monthly payments.
Calculate the balance due after 10 years.
You would like to borrow $ 185000 over 30 years. The interest rate applied is 4.5% with 1.5 points. Calculate the effective annual rate of interest you will be charged.
Assume a homeowner at age 62, with an equity in the house of $600,000, applies for a reverse mortgage for 10 years.
Calculate the expected dollar value of the reverse mortgage (see the textbook).
Calculate the monthly income received by the homeowner if the bank applies 3.25% in annual rate of interest.
You borrow $65,000 with a variable rate loan for 10 years. During years 1-3 (for 3 years) you pay 2.75%.
Calculate the monthly payments.
After the 3rd year, the rate rises to 3.5%. Calculate your new monthly payments.
Consider a $250,000 loan, 30 years in maturity and 4.25% interest. Calculate the market value of the loan after 5 years if interest rates rise to 4.5%.
Consider the following 2 choices.
A: Buy the house for $225,000 with 180,000 in loan at 4.5% over 15 years.
B: buy the house for $245,000 with $180,000 in loan at 2.5% over 15 years.
Choose the better alternative. (Show your calculations, and state your reasoning).
Define in your own wording the following terms.
Fee Simple Estate.
Title (in real estate)
Loan Assignment.
Due on Sale Clause in Mortgages.
Define a short sale in real estate.
Write briefly (about 10 lines) about the important features of foreclosure.
Financial Management Theory And Practice
ISBN: 978-0176583057
3rd Canadian Edition
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason