What is the original annual mortgage payment, Accounting Basics

You just took out a variable-rate mortgage on your new home. The mortgage value is $100,000, the term is 30 years, and initially the interest rate is 8%. The interest rate is fixed for five years, after which time the rate will be adjusted according to prevailing rates. The new rate can be applied to your loan either by changing the payment amount or by changing the length of the mortgage.

a Assuming annual payments, what is the original annual mortgage payment?

b Prepare an amortization schedule for the first five years. What will be the mortgage balance after five years?

c If the interest rate on the mortgage changes to 9% after five years, what will be the new annual payment that keeps the termination time the same?

d Under the interest change in part (c), what will be the new term if the payments remain the same?

Posted Date: 3/12/2013 4:15:57 AM | Location : United States

Related Discussions:- What is the original annual mortgage payment, Assignment Help, Ask Question on What is the original annual mortgage payment, Get Answer, Expert's Help, What is the original annual mortgage payment Discussions

Write discussion on What is the original annual mortgage payment
Your posts are moderated
Related Questions
Ask queMary Lapointe, the Chief Financial Officer of your Northern Travel Experience company, has advised that the company will be opening an office in Nunavut this year. The offic

A machine valued on the books at $8500 was sold on credit to $8000.

Q. What is Date column in journal? The first column on every journal page is for the date. Intended for the first journal entry on a page this column contains the year and mont

Q. Define about Assets and Liabilities? Assets are feasible future economic benefits obtained or controlled by a particular entity as a result of past events or transactions.

Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years an

Determine the concept of Closing entries-(REID) 1)  Close Sales account and other income statement accounts with credit balances to Income Summary. 2)  Close each expense ac

Adjusting entries in the general journal Be sure to put down the words "Adjusting Entries" at the beginning of journal after the last entry of month. By placing these words at

Q. What is transposition or slide error explain? When the trial balance doesn't balance try re-totalling the two columns. If this step doesn't locate the error divide the diffe

what all things do we have to treat in revaluation account

Q. Principles of consolidation? The consolidated financial statements of the Company comprise the accounts of The Walt Disney Company and its subsidiaries after elimination of