Log in
Finance
2
answers
0
watching
579
views

Mr. Smith is purchasing a $ 90000 house. The down payment is 20% of the price of the house. He is given the choice of two mortgages: a) a 25-year mortgage with an annual interest rate of 10 %, with interest compounded monthly.

Find (i) the monthly payment: $

(ii) the total amount of interest paid: $

b) a 15-year mortgage with an annual interest rate of 10 %, with interest compounded monthly.

Find (i) The monthly payment: $

(ii) the total amount of interest paid: $

Watch
2
answers
0
watching
579
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share
Nelly Stracke
Nelly StrackeLv2
28 Sep 2019
Already have an account? Log in
Share

Related questions

Buying a House

2) After you've been working five years, you decide to buy a house. As a rule of thumb, your house payments should not exceed 25% of your gross pay. Based on your annual salary during your sixth year on the job $42, 543, what is the maximum amount you could afford in the house payments per year?

3) Calculate the maximum house payment you could afford per month?

4) Assume you will qualify for an 8%, 30-year conventional mortgage. How much could you borrow based on the maximum monthly payment you can afford? (8% compounded monthly)

5) Lenders often expect that you have 20% of the value of the house as a down payment. Assume that you will be able to make a 20% down payment. What is a total cost of the house you could afford? The total cost is equal to the mortgage plus the down payment. (HINT: Use algebra. You want to calculate 20% of the value of the house, not 20% of the amount you are financing.)

6)What is the amount you would pay for for this house over the 30-year mortgage with monthly payments? Don't forget to include the down paument. (In the words, how much total cash will you be paying for this house - not taking into account the time value of money?)

7) How large would your monthly payments be if you could qualify for a 2-year mortgage at 8% compounded monthly (for the same amount you could borrow based on your calculations in question 4)?

CNBC.com reported mortgage applications dropped in March 2015due to an increase in the rate on 30-year fixed rate mortgages toan average of 4.01%. Dennis Natali wants to purchase a vacationhome for $370,000 with 20% down. Calculate his monthly payment fora 25-year mortgage at 5.0%. Calculate totalinterest. (Use Table 15.1.) (Do not roundintermediate calculations. Round your finalanswers to the nearest cent.)

Monthly payment $
Total interest $

Jim has an annual income $240,000. jim is looking to buy a house that is selling for $400,000 is a very desirable area, sought after by buyers. He applies for a loan at the bank and is approved for fully amortizing 30 years FRM at an annual rate of 3.40%, with monthly payments, compounded monthly. The bank will not lend more than 80% LTV. The payments, compounded monthly. The bank will not lend more than 80% LTV. The appraisal indicates the house is worth more than $375,000. Jim does not PMI. 1. What is the biggest mortgage Jim can get? 2.What will his monthly payment be? Jim decides to shop around more and finds option #2 - a bank willing to give him a 90% LTV mortgage based upon the $375,000 appraised value at an interest rate of 3.65%. 3. What is the additional amount he can borrow? 4. over the life of the loan, what are the total payments he will make, including the down payment, for option #2? 5.What is the total cost of the incremental amount borrowed for option #2? 6. What is the effective interest rate for the additional amount borrowed under option #2?

Weekly leaderboard

Home
Homework Help 3,900,000
Finance 370,000
Start filling in the gaps now
Log in