CH 4 Problems, Finance Basics

Homework Chapter 4
A mortgage loan in the amount of $100,000 is made at 12% interest for 20 years. Payments are to be monthly in each part of this problem.
a. What will monthly payments be if:
1. The loan is fully amortizing?
2. It is partially amortizing and a balloon payment of $50,000 is scheduled at the end of year 20?
3. It is a nonamortizing or interest only loan?
4. It is a negative amortizing loan and the loan balance will be $150,000 at the end of year 20?
b. What will the loan balance be at the end of year 5 under parts a (1) through a (4)?
c. What would be the interest portion of the payment scheduled for payment at the end of month 61 for each case (1) through (4) above?
d. Assume that the lender charges 3 points to close the loans in parts a (1) through a (4). What would be the APR for each?
e. If the loan is prepaid at the end of year 5, what will be the effective rate of interest for each loan in parts a (1) through a (4)?
Posted Date: 9/11/2012 1:06:26 PM | Location : United States







Related Discussions:- CH 4 Problems, Assignment Help, Ask Question on CH 4 Problems, Get Answer, Expert's Help, CH 4 Problems Discussions

Write discussion on CH 4 Problems
Your posts are moderated
Related Questions
Which of the following is true with regards to rising interest rates. A. Use long-term loans to take advantage of current low rates. B. The term of the loan is ot impacted by risin

What are the factors that affect the interest rate and how?

Price Earnings Ratio Valuation P/E ratio is traditionally employed for valuation of shares however it is an important ratio in the valuation of business. The P/E ratio is the



Explain about the Internal Rate of Return Internal rate of return (IRR) is the rate of discount that makes the present value of all the revenues (cash flows) from the invest

Mermaid Coffee Corporation (MCC) has 1,000,000 shares of stock currently trading at $42 per share. The company has issued 20,000 bonds, each with market value $928.59 and yield to

Example of Miller-Orr Model XYZ's management has put the minimum cash balance to be equivalent to Sh.10, 000. The standard deviation of daily cash flow is of Sh.2, 500 and the

SCENARIO You have just moved out of home and have a part-time job that pays you $18 per hour after tax (you work 20 hours a week). You also have $5000 in a savings account. You

Clientele Effect Theory Advance via Richardson Petit in 1977.It stated such different types of groups of shareholders or clientele have different type of preferences for divid