Question

A borrower has a $83000 loan with the "Easy-Credit" Finance Company. The loan is to be...

A borrower has a $83000 loan with the "Easy-Credit" Finance Company. The loan is to be repaid over 26 years via monthly payments at 3.5%/year compounded monthly. Just after the 78th payment, the borrower learns that his local bank would lend him money at 1.5%/year compounded monthly. Assuming that the contract stipulates an early repayment penalty equal to 3 months' interest on the outstanding balance at the time of refinancing, what would be the new monthly payment?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

please ask if any query.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are a lender and have offered a borrower a $400,000 30-year fixed-rate mortgage loan at...
You are a lender and have offered a borrower a $400,000 30-year fixed-rate mortgage loan at 4.68% with monthly payments and fully amortize. The loan does not have any origination fees, but does have a 2% prepayment penalty during the loan's first 5 years. What would be the size of the prepayment penalty if the borrower repaid all remaining principal after the 46th payment? Please indicate your answer with two spaces right of the decimal.
1. A borrower has secured a 30 year, $100,000 loan at 8%.  Fifteen years later, the borrower...
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?  ...
To finance the purchase of some computer equipment and software for your consulting company, you are...
To finance the purchase of some computer equipment and software for your consulting company, you are taking out a $24,000 loan today. The interest rate on the loan is 3.5% annual percentage rate compounded monthly. You will make monthly payments to the bank to pay off this loan over 5 years. (a) (9 pts) What is the amount of your equal monthly payment? (c) (6 pts) How much money would you need if you want to pay off this loan...
A local finance company quotes a 20% interest rate on a one year loan. If you...
A local finance company quotes a 20% interest rate on a one year loan. If you borrow $10,000, the interest for the year will be $2,000. Because you will pay a total of $12,000, the finance company requires that you pay $1,000 per month over the next 12 months with the first payment in one month. Is this a 20% loan? Find the effective annual interest rate on this loan.Find the annual interest rate compounded monthly.
Angelo Lemay borrowed $8000 from his credit union. He agreed to repay the loan by making...
Angelo Lemay borrowed $8000 from his credit union. He agreed to repay the loan by making equal monthly payments for five years. Interest is 9% compounded monthly. (Please use financial BAII calculator method by showing calculator inputs) (a) What is the size of the monthly payments? (b) How much will the loan cost him? (c) How much will Angelo owe after 18 months? (d) How much interest will he pay in his 36th payment? (e) How much of the principal...
Amortization schedule. chuck ponzi has talked an elderly woman into loaning him $25,000 for a new...
Amortization schedule. chuck ponzi has talked an elderly woman into loaning him $25,000 for a new business venture. she has, however, successfully passed a finance class and requires chuck to sign a binding contract on repayment of the $25,000 with an annual interest rate of 10% over the next 5 years. ponzi may choose to pay off the loan early if interest rates change during the next 5 years. determine the ending balance of the loan each year under the...
chuck ponzi has talked an elderly woman into loaning him $15,000 for a new business venture....
chuck ponzi has talked an elderly woman into loaning him $15,000 for a new business venture. she has, however, successfully passed a finance class and requires chuck to sign a binding contract on repayment of $15,000 with an annual interest rate of 8% over the next 5 years. Ponzi may choose to pay off the loan early if interest rates change during the next 5 years. determine the ending balance of the loan each year under the three different payment...
1-What should an investor pay for an investment property promising a $200,000 return after 10 years...
1-What should an investor pay for an investment property promising a $200,000 return after 10 years if a 7% annual return (compounded annually) on investment is projected? 2-Given the following information on a 30-year fixed-payment fully-amortizing loan, determine the remaining balance that the borrower has at the end of five years. Interest Rate: 4%, Monthly Payment: $3,000 3-An investor has an opportunity to invest in a rental property that will provide net cash returns of $2,000 per month for 10...
please answer all questions!!! 1. A loan may be repaid using the following two options of...
please answer all questions!!! 1. A loan may be repaid using the following two options of payments: i) Payments of 2,000 at the end of each year for eighteen years ii) Payments of 2,500 at the end of each year for nine years. Which of the following is closest to the effective annual interest rate being paid on the loan? A. 14% B. 17%. C. 20%. D.23%. E. 26% 2. A loan is being repaid by payments of 1100 at...
You are considering taking out a loan from the so-called “Tiger B. Shark” finance company. The...
You are considering taking out a loan from the so-called “Tiger B. Shark” finance company. The company’s leaflet states that the loan you plan to take will be settled on a “four-for-five” weekly basis. You ask your friend, who works in the banking industry, for advice on the following issues related to the loan. (a)     What is the weekly interest rate charged on the loan as implied by the phrase “four-for-five weekly basis” in the leaflet?                                                        (b)     What...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT