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
please i need to know how to solve question in balance sheet

Q. Explain about Staff accountant? Let us travel with Tracy as she begins her career at the staff level. At the onset, she works directly under a senior accountant on each of h


What are the components or materials used by Accounts receivable departments? Ans) Accounts Receivable department is very vital department of the company. The responsibilities o

How do I complete this chart

Q. Example of Income statement? Income statement demonstrates the income statement Lyons prepared. The focal point in this income statement is on determining the cost of goods

What does a business owner do when the cash balance approaches zero and there are bills to be paid? (Hint: look at the financing activities of the Cash Flow Statement and then lo

While mainly students are aware that accountants frequently assist their clients with tax returns and other tax issues, few are aware of the large number of diverse and challenging

Goods purchased from ranu p5000

What is OWNER'S EQUITY Difference between Liabilities and Assets is Owner's Equity. The can also be known as capital, proprietorship, or net worth.