Monthly payment that he can receive with this mortgage

Assignment Help Financial Management
Reference no: EM131297592

Use the following information to answer all of the following:

Karon owns a home worth $245,000. Howard Mortgage is offering a reverse mortgage with a 15-year term, a maximum loan balance equal to 60 percent of the home’s current value and a 7.25 percent interest rate.

A. If Karon takes out no money at origination, what is the monthly payment that he can receive with this mortgage?

a. $1,341.91

b. $453.78

c. $756.31

d. $2,236.51

e. None of the above.

B. Suppose Karon decides to take out $40,000 at origination. What will Karon’s monthly annuity be in this case?

a. $88.64

b. $391.16

c. $1,121.45

d. $818.93

e. None of the above.

C. Suppose instead that Karon wants to as large a lump-sum payment as possible. What is the largest amount of money Karon can receive at origination?

a. $82,849.87

b. $724,503.23

c. $49,709.92

d. $434,701.94

e. None of the above.

Reference no: EM131297592

Questions Cloud

Business uses technology to promote organizational structure : Has the firm downsized in recent years by removing middle managers from its organizational structure? Explain how the business uses technology to promote its organizational structure.
Barriers to the localization of expatriate manager : Do you believe that alternative assignment can substitute for traditional expatriate assignments in the long run? Please discuss the major opportunities and barriers. What are the major barriers to the localization of expatriate manager?
Identify organisation which would benefit from application : For each material, prepare two paragraphs: the key ideas from the materials - not a summary - you must select the key ideas (most important) and talk about them. identify an organisation which would benefit from the application of these ideas and e..
Create a new field in the manufacturer table after rlmfgcode : Create a new field in the Manufacturer table after RlMfgCode named Website with the Hyperlink data type. Save the table. Switch to Datasheet view, add the Web site http://www.lenox.com to the Lenox China record (7).
Monthly payment that he can receive with this mortgage : Karon owns a home worth $245,000. Howard Mortgage is offering a reverse mortgage with a 15-year term, a maximum loan balance equal to 60 percent of the home’s current value and a 7.25 percent interest rate. If Karon takes out no money at origination,..
Business unit competitive strategy : How does mass customization support a business unit's competitive strategy?
What is spline curve : COMPUTER GRAPHICS & MULTIMEDIA (IT-602) - Implement DDA algorithm to compute pixels along the line and What is spline curve? Differentiate between interpolation spline and approximation spline.
Company corporate-level strategy : Define and discuss the company's corporate-level strategy. What are the benefits and/or shortcomings of Starbucks' diversified portfolio?
Why would the marketing manager request decentralization : Has Janet created an organizational structure? If so, how?- Why would the marketing manager request decentralization of authority in Paris, France?

Reviews

Write a Review

 

Financial Management Questions & Answers

  Dividends on common stock

Dividends on common stock are which one of the following?

  Value-added industries-what is the net present value

You are the CEO of Value-Added Industries, Inc. (VAI). Your firm has 10,000 shares of common stock outstanding, and the current price of the stock is $100 per share. What is the net present value of this project? How many shares of common stock must ..

  Exchange-listed options on primo corporation common stock

The following price quotations are for exchange-listed options on Primo Corporation common stock. With transaction costs ignored, how much would a buyer have to pay for one call option contract. Assume each contract is for 100 shares.

  The date it was contributed to the partnership

Sam and Drew are equal partners in SD LLC formed on June 1 of the current year. Sam contributed land that he inherited from his uncle in 2007. Sam’s uncle purchased the land in 1982 for $30,000. The land was worth $100,000 when Sam’s uncle died. The ..

  What is the aftertax cost-pretax cost of debt

Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 18 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has an embedded cost of 8 percent annually. Wha..

  Calculate a lower bound for value of a six month call option

Calculate a lower bound for the value of a six-month call option on the currency with a strike price of $1.40 if it is (a) European and (b) American.

  Asset at predetermined price on specified date in future

Which of these formalizes an agreement between two parties to exchange a standard quantity of an asset at a predetermined price on a specified date in the future?

  Compute the average rate of return on the market and on cdd

Write down a table with the rate of return on the market and on portfolio CDD in each of the four possible states. - Compute the average rate of return on the market and on CDD.

  Planning to save for retirement

You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 11% APR compounded monthly, and the bond..

  Default risk of various municipal and corporate bonds

Agencies such as Moody’s, Fitch, and Standard and Poor’s rate the default risk of various municipal and corporate bonds. While their rating systems are proprietary, it is widely known that they rely on financial ratios as key inputs to their bond rat..

  A swap is a method for reducing financial risk

A swap is a method for reducing financial risk. Which of the following statements about swaps is not correct? Hedging activities and buying insurance are examples of _______________.

  Project projected IRR can be less than the WACC

Hart corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC (and even negative), in which case it will be rejected. Year: 0 1 2 3 Cash flows: -$1,..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd