What are the conservative estimates

Assignment Help Financial Management
Reference no: EM131301915

Go to calculators.aol.com/tools/aol/home01/tool. fcs and click "How much can I borrow?"

a. Input $3,000 wages, $500 in other income, $300 in auto loans, $100 for student loans, $125 for other loans, a desired interest rate of 9%, a 15-year loan term, a 5% down payment, no other debts, a $200 monthly credit card payment, $1,500 property tax, and $300 property insurance. What are the conservative estimates and aggressive estimates of what you can afford to borrow to finance the purchase of a home?

b. Now change the interest rate to 10%. What is the difference in monthly payments on the loan?

c. Now change the loan term to 30 years. What is the difference in monthly payments on the loan?

Reference no: EM131301915

Questions Cloud

Compute the current cost of jazzs college education : Calculate the current cost of Jazz's college education. Calculate the capital needs of the couple at retirement and the current value (today's value) of their retirement needs.
Should she increase her estimated income : She is a waitress and makes much of her income from tips and she can exaggerate her estimated income.- Should she increase her estimated income on the mortgage application?
How this criminal justice agency is structured : Examine the arguments for the existence of this department and the concepts and information provided in your text and this course. Also consider the question "Is the feeling of heightened security worth the risk of eroding our individual Constitut..
General form of the equation of the line : Find the equation of the line with the given properties. Sketch the graph of the line. Passes through (-6,2) with a slope of 6. Type the general form of the equation of the line.
What are the conservative estimates : What are the conservative estimates and aggressive estimates of what you can afford to borrow to finance the purchase of a home?
What is the fed ex companys mission statement : What is the Fed Ex company's mission statement? What is company's vision statement? What role do these have on the way business operates? Do the company's actions seem to align to their vision and mission statements?
Did the british authority intervene on behalf of unbelievers : Did the British authorities intervene on behalf of the unbelievers? In no more than three sentences, explain the meaning of the Chiefs Plot. What was to happen to Xhosa believers caught stealing from either nonbelievers or the British?
What is the range of values for homes in your area : What is the range of values for homes in your area?-  What has been the general price trend of home values in your area?
What is its differential equation : If θ is small so that sin θ and cos θ can be approximated as θ and 1, respectively, what is its differential equation?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the annualized rate of return that the bond

You purchase a $1000 face value bond with 7 years to maturity for $850. One year later, you sell the bond to a bond investor for $784. Suppose that the bond investor holds the bond to maturity. Calculate the annualized rate of return that the bond in..

  Using the capital asset pricing model

An analyst believes that a stock for a large company has a beta of 1.4. The 10 year government bond rate is 4%, and the analyst expects the return on the S&P500 to be 12%. Using the capital asset pricing model, the analyst would estimate the required..

  At what period to maturity is the bond

You have a 20 year bond, coupon is 8%, compounded annually, market rate of interest is 7.5%, par value of $1000. However, you will receive a different coupon in the last 10 years. The PV of the bond is $987.69. What is the coupon rate for the last 10..

  What is the modified internal rate of return for the project

A company has an opportunity to invest in a project that is expected to result in after-tax cash flows of $18,000 the first year, $20,000 the second year, $23,000 the third year, -$8,000 the fourth year, $30,000 the fifth year, $36,000 the sixth year..

  Because of the adverse selection problem

Poor people have difficulty getting loans because _____. Financial intermediaries provide their customers with _____ Because of the adverse selection problem, _____

  Accrual accounting and cash basis accounting

Identify the differences between accrual accounting and cash basis accounting. How is the profit margin calculated? Discuss its use in analyzing a company's performance. What is the purpose of closing entries? Describe the closing process

  What rate should firm use to discount project cash flows

Titan Mining Corporation has 8.8 million shares of common stock outstanding, 320,000 shares of 4 percent preferred stock outstanding, and 170,000 7.6 percent semiannual bonds outstanding, par value $1,000 each. If Titan Mining is evaluating a new inv..

  Underlying stock and they are both exactly at the money

A put and call option are written on the same underlying stock and they are both exactly at the money. Both are European options with the same expiration date, which is several months from now. The risk-free rate of interest is 1%. One of the followi..

  What is the current value of her retirement fund

How much can I borrow for the purchase of my first home if I can afford to make monthly payments of $500, and the annual interest rate is 6% on a 30-year mortgage? Mr. Nelson will recieve $15,000 a year for the nect 20 years from her retirement fund...

  Expected selling price

Assume that CAPM is valid. A share of stock is now selling for $105. It will pay a dividend of $7 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 7% ..

  What is estimated cost of equity

What is Estimated cost of equity, Estimated growth rate, DCF Estimate of Share Price, Imputed growth rate, Estimated future dividends.

  EAR is the same regardless of the length of the investment

You can earn $32 interest on a $1,000 deposit for 8 months. If the EAR is the same regardless of the length of the investment how much interest will you earn on a $1,000 deposit for:

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