Mortgage loan whose initial principal balance

Assignment Help Financial Management

Reference no: EM132057752

At the beginning of 2016, Mr. Greenspan decides to take advantage of the low interest rate and takes out a 30-year mortgage loan whose initial principal balance is $300,000. The quoted rate is 2% per annum, and Mr. Greenspan will make payments semi-annually.

1) What is Mr Greenspan's semi-annual payment?

2) How much does Mr. Greenspan need to pay toward interest during the second payment period (second half of the first year)?

3) What is Mr Greenspan's remaining balance at the end of the 5th year (i.e. after both payments during year 5)?

4) Mr Greenspan, a very graphical person, decides to plot remaining balance against time to maturity for his 30 year loan. What graph will Mr Greenspan's graph most closely resemble (with time on the x-axis and remaining balance on the y-axis)?

Reference no: EM132057752

Questions Cloud

Determine the schedule and cost variance for a project : Determine the schedule and cost variance for a project that has an actual cost at month 20 of $750,000, a scheduled cost of $600,000.

What are the two ways to raise money for a business : Explain the advantages and disadvantages. While doing so, provide an example of where each scenario makes fiscal sense.

What is ethical behavior : What is ethical behavior and what is not in regards to gathering information on a target without written consent - Is this clearly defined or are there

How much will ella need to save annually over : How much will Ella need to save annually over the next 30 years to fund her retirement account?

Mortgage loan whose initial principal balance : Mr. Greenspan decides to take advantage of the low interest rate and takes out a 30-year mortgage loan whose initial principal balance is $300,000.

What is the dollar amount of the principal reduction : Construct an amortization schedule, in the 2nd year row, corresponding to his second annual payment, what is the dollar amount of the principal reduction?

What strategies could you personally apply in social network : Analyze and discuss how diversity (e.g. cultural, political, gender, ethnicity, or economic) can be seen by the differing posts presented on the social thread.

About Stokenchurch-What is the company WACC : Here is some information about Stokenchurch Inc. What is the company’s WACC?

Explain the responsibility of the accounting department : What is one advantage of having 2 costs pools (one for fixed costs and one for variable costs) for each service department?

User Account

All Pages