Taking one-third off time it takes to repay your mortgage

Assignment Help Financial Management
Reference no: EM13849045

Your friend tells you he has a very simple trick for taking one-third off the time it takes to repay your mortgage: Use your Christmas bonus to make an extra payment on January 1 of each year ( that is, pay your monthly payment due on that day twice). If you take out your mortgage on July 1, so your first monthly payment is due August 1, and you make an extra payment every January 1, how long (in years) will it take to pay off he mortgage? Assume that the mortgage has an original term of 30 years and an APR of 7.8%. (Hint: The original balance does not matter in this problem, so you can pick any number you want. In this case we will use $100,000 as the principal balance.) Round to three decimal places.

Reference no: EM13849045

Questions Cloud

Critically evaluate of role of transformational leadership : Write a research paper that Critically Evaluate of Role of Transformational Leadership in the Organizational Performance.
Bonds outstanding with coupon rate : Union Local School District has bonds outstanding with a coupon rate of 3.2 percent paid semiannually and 21 years to maturity. The yield to maturity on these bonds is 3.5 percent and the bonds have a par value of $5,000. What is the price of the bon..
The treatment of dental caries in preschool children : The treatment of dental caries in preschool children
Term paper should consist of an abstract-introduction : The impacts of the central bank's policy rate on the lending rate of the commercial banks. a case study of barclays bank of ghana limited. The term paper should consist of an Abstract, introduction, background, statement of the problem, objectives, h..
Taking one-third off time it takes to repay your mortgage : Your friend tells you he has a very simple trick for taking one-third off the time it takes to repay your mortgage: Use your Christmas bonus to make an extra payment on January 1 of each year.
Reduce the amount of time left to pay off your loan : You have some extra cash this month and you are considering putting it toward your car loan. Your interest rate is 6.6%, your loan payments are $664 per month, and you have 36 months left on your loan. If you pay an additional $1,100 with your next r..
Examine how social policy influences and explains : examine how social policy influences and explains
Outstanding student loan with required payments : You have an outstanding student loan with required payments of $600 per month for the next four years. The interest rate on the loan is 9% APR (compounded monthly). Now that you realize your best investment is to prepay your student loan, you decide ..
Validity and reliability issues : Validity and Reliability Issues

Reviews

Write a Review

Financial Management Questions & Answers

  What is the present value of the bond show your work

After six months go by, you receive the first interest payment of $300. The annual market interset rate has declined to 5 percent and you decide to sell the bond. What is the bond's present value when you sell it? show your work.

  1size-up hcm using historical ratio analysis and a

1size-up hcm using historical ratio analysis and a discussion of its business risk and financial risk.the q1 tab

  Portfolio return-rate assumption-investment portfolio

You are told that you will need to accumulate $1,400,000 by day one of retirement in order to achieve your desired standard of living. How much will you need to contribute at the end of each year to accumulate that sum given the following information..

  Determine the amount of additional financing

In the Industrial Supply Company example (Table 4.4) it was assumed that the company’s fixed assets were being used at nearly full capacity and that net fixed assets would have to increase proportionately as sales increased.

  Compute the debt ratio and equity ratio

Compute the gross margin ratio and net profit margin ratio, compare the current ratio and acid-test ratio and compute the debt ratio and equity ratio.

  Standardized measure of how stocks perform relative

Correlation, a standardized measure of how stocks perform relative to one another in different states of the economy, has a range from _______

  Quantitative problem-what is the value of the bond

Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 7.2%, what is the value of the bond? Round your answer to the nearest cent. D..

  Mortgage to finance the purchase of a large tract of land

You have just arranged for a $1,580,000 mortgage to finance the purchase of a large tract of land. The mortgage has an APR of 5.8 percent, and it calls for monthly payments over the next 20 years. However, the loan has an eight-year balloon payment, ..

  About the sales increase

Maggie's Muffins, Inc., generated $4,000,000 in sales during 2013, and its year-end total assets were $2,600,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..

  How will reverse innovation impact the marketplace

How will reverse innovation impact the U.S. marketplace? What specific products and companies do you expect to see impacted by this trend?

  The finance department of a large corporation has evaluated

the finance department of a large corporation has evaluated a possible capital project using the npv method the payback

  The nominal return on your investment

You want to have $6 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 9 percent and the inflation rate is 5.4 percent. What real amount must you deposit each year to achieve your goal?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd