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Five years ago you borrowed 200,000 to finance the purchase of a 240,000 home. The interest rate on this (old) mortgage is 10% MEY, and the level payments were made monthly to amortize the loan over 30 years (you did not curtail the loan in any way, nor do you ever intend to). You have found another lender who is willing to refinance the outstanding loan balance at 8% with monthly payments over 30 years. The new lender will charge two discount points on the loan, and other refinancing costs will amount to $5,000. There are no prepayments penalties on either loan, and you feel that the appropriate opportunity cost to apply to the refinance decision is 8%.
a) What is the payment on the old loan?
b) What is the current loan balance on the old loan (5 years after origination)?
c) What would be the monthly payments on the new loan?
d) Should you refinance today, if the new loan is expected to be outstanding for 5 years?
Merton Enterprises has bonds on the market making annual payments, with 12 years to maturity, and selling for $963. At this price, the bonds yield 7.5 percent. What must the coupon rate be on Merton’s bonds?
a. suppose the second last 12.7 million and last 76.7 million mortgage loans in loan group 1 in the nationwide
q1. nbspnbsp a define agency problem explaining two types of agency costs.b comment on the following quote... agency
straight supply is a major supplier of medical components to large pharmaceutical corporations. bonnie straight is a
Image your small business that produces very small remote control aircraft capable of long sustained flights. You are ready to expand your business by competing for Department of Defense (DoD) contracts.
please answer the following four questions. important in order to receive full credit you need to answer the questions
Arbitrage Financial is offering two possible investments with the same level of risk.
the six month gold futures price is currently 1598. the riskofree interest rate is 4.50nbsp per annum with
You are managing your individual retirement accounts. Are you worried about losing money in your retirement accounts? What could you do to reduce risk or increase risk if you’re not worried about losing money? Explain.
Suppose you borrowed $15,000 at a rate of 8.5% and must repay it in 5 equal instalments at the end of each of the next 5 years. How much would you still owe at the end of the first year, after you have made the first payment?
Classify the problems as to whether they are pure-integer, mixed-integer, zero-one, goal, or nonlinear programming problems.
The Toy Chest pays an annual dividend of $4.80 per share and sells for $93.20 a share based on a market rate of return of 15 percent. What is the capital gains yield?
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