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
On January 1, 2012, Muller Co. borrowed cash from Washington Valley Bank by issuing a $100,000 face value 3-year installment note payable that carried a 7% interest rate. The note

Q. Explain about Modifying conventions? In certain examples companies don't strictly apply accounting principles because of modifying conventions (or constraints). Modifying co

Components of Profit and Loss Account The Profit & Loss Account intend to check profit. It has three parts. 1) The Trading Account: These account the money in (revenue)

Q. Sales returns affect both revenues and cost of good? When a company sells merchandise to customers then it transfers the cost of the merchandise from an asset account that i

XYZ Solutions Pvt Ltd purchased a new vehicle for their employee Sonia to use for both work and private purposes on 1 November 2010.  The car cost $38,500 and they paid an extra $2

Consignor is the person who is the holder of the goods and who distribute the goods to the consignee. Consignee is the person who takes the goods and he just possesses the goods

Problems: Please show all calculations. Claudette, Inc., provides warranties for many of its products. The January 1, 2014, balance of the Estimated Warranty Liability account

The comparative statements of Lucille Company are presented here. LUCILLE COMPANY Income Statements For the Years Ended December 31 First number are 2012 2012 then 2011

Inventory is habitually the largest and most important asset owned by a merchandising business. The inventory of some companies similar to car dealerships or jewellery stores may c

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