Question

a)The fully amortising home loan Bob and Jill were discussing was for 80% of a $1 mil house, at 4% interest p.a., paid monthly over 30 years. The monthly payments were solved as $3,819.32.

Jill chimes in ...

*"After 5 years, I may consider making some changes to the
terms of the loan. What is the mortgage balance
remaining?"*

b)Jill continues ...

*" Now that we know the balance after 5 years, I'm concerned
that interest rates may go up by then as our fixed rate of 4% after
5 years. Oh sorry, didn't I mention our interest rate was fixed for
5 years? Sorry, my bad.*

*I was watching ABC news last night and they said the RBA may
push up rates by 50 basis points. I don't know what that means. How
much will I need to repay every month if that happens after fixed
rate term expires? "*

*Hint: You may assume that the banks will pass on the full
increase in cost of funds from the RBA to their customer
loans.*

*When you enter in the loan PV, enter it in as a -tive to
satisfy the calculator convention.*

*Enter your answer without $ and to 2 decimal places*

Answer:

Answer #1

**SEE THE IMAGE. ANY DOUBTS,
FEEL FREE TO ASK. THUMBS UP PLEASE**

**SOLVED WITH BA II PLUS
CALCULATOR**

A borrower has a 30-year fully amortizing mortgage loan for
$200,000 with an interest rate of 6% and monthly payments. If she
wants to pay off the loan after 8 years, what would be the
outstanding balance on the loan? (I know the correct answer would
be $175,545, but how to find the amount that goes in interest and
principal?)

1. A borrower has secured a 30 year, $100,000 loan at
8%. Fifteen years later, the borrower has the
opportunity to refinance with a fifteen year mortgage at
7%. However, the up-front fees, which will be paid in
cash, are $2,000.
What is the monthly payment on the initial
loan?
What is the loan balance at the time of
refinancing?
What is the return on investment if the borrower expects to
remain in the home for the next fifteen years after
refinancing? ...

A few years back, Dave and Jana bought a new home. They borrowed
$230,415 at an annual fixed rate of 5.49% (15-year term) with
monthly payments of $1,881.46. They just made their twenty-fifth
payment and the current balance on the loan is $208,555.87.
Interest rates are at an all-time low, and Dave and Jana are
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made the following offer: 15-year term, 3.0%, plus out-of-pocket
costs of $2,937. The...

Order these loans from highest monthly payment to lowest monthly
payment. (Enter 1 as your answer to designate loan with highest
payment, 2 as loan with second highest payment, and so on up to 5
to designate loan with lowest payment.) Each of the following loans
is for $300,000 and is a fixed rate mortgage with a 3.5% interest
rate. Assume 30 years.
Balloon payment of $500,000 is due at maturity
Balloon payment of $250,000 is due at maturity
The...

Gerald has taken out a loan of $100,000 today to start a
business. He has agreed to repay the loan on the following
terms:
• Repayments will be made on a monthly basis. The first
repayment will be made exactly one month from today.
• The repayments for the first 5 years will cover interest
only to help reduce the financial burden for Gerald’s business at
the start.
• After the 5-year interest-only period, Gerald will make
level monthly payments...

Gerald has taken out a loan of $100,000 today to start a
business. He has agreed to repay the loan on the following
terms:
• Repayments will be made on a monthly basis. The first
repayment will be made exactly one month from today.
• The repayments for the first 5 years will cover interest only
to help reduce the financial burden for Gerald's business at the
start.
• After the 5-year interest-only period, Gerald will make level
monthly payments...

PLEASE ANSWER C!!!
Bob & Betty Homebuyers want to make an offer on this
property at the list price. Bob earns $48,000 per year and Betty
earns $54,000 per year. They have very good credit. Their monthly
payments are $200 for student loans, $350 for their car payment and
minimum credit card payment of $50. They have savings of $125,000.
The balance of their student loans is $40,000.
Insurance on this house will cost them $900 per year. Property
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Fill in the blanks to complete the passage about home mortgage
refinancing.
Drag word(s) below to fill in the blank(s) in the passage.
With a –1) SELECT A LABEL mortgage loan, the monthly payment
amount does not change. If market interest rates go –2) SELECT A
LABEL , the homebuyer reaps the benefit of having borrowed at a
rate better than the current market. On the other hand, if rates go
–3) SELECT A LABEL, the homebuyer can refinance, taking...

1. On January 1, Kenneth borrows $5600 with a fixed interest
rate on the loan of 10% and a loan term of 2 years. He will be
making monthly payments of $258.41. How much of Kenneth’s first
loan payment on February 1 would be principal? (Round
answers to 2 decimal places, e.g. 52.75.)
$213.51
$211.74
$289.08
$252.06
2.What is the key variable in negotiating an auto loan?
Maintenance schedule.
Lowest interest rate possible.
Length of the loan.
Payment.
3.William wants...

Gerald has taken out a loan of $100,000 today to start a
business. He has agreed to repay the loan on the following
terms:
• Repayments will be made on a monthly basis. The first
repayment will be made exactly one month from today.
• The repayments for the first 5 years will cover interest only
to help reduce the financial burden for Gerald’s business at the
start.
• After the 5-year interest-only period, Gerald will make level
monthly payments...

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