Reference no: EM13816982
A house can be purchased for $155,000, and you have $25,000 cash for a down payment. You are considering the following two financing options:
Option 1. Getting a new standard mortgage with a 7.5% (APR) interest and a 30-year amortization.
Option 2. Assuming the seller’s old mortgage, which has an interest rate of 5.5% (APR), a remaining amortization of 25 years (the original amortization was 30 years), a remaining balance of $97,218, and payments of $593 per month. You can obtain a second mortgage for the remaining balance ($32,782) from your credit union at 9% (APR) with a 10-year repayment period.
(a) What is the effective interest rate of the combined mortgage?
(b) Compute the monthly payments for each option over the life of the mortgage.
(c) Compute the total interest payment for each option.
(d) What homeowner’s interest rate makes the two financing options equivalent?
|
Identifying misleading information in an argument
: Identifying Misleading Information in an Argument. Determine whether or not the argument uses any deceptive statistics. Give your opinion on whether or not the argument has persuaded you. Explain why or why not.
|
|
Identify the best value discipline and generic strategy
: Identify the best value discipline, generic strategy and grand strategy for your organization.
|
|
What was the yield to maturity of the bond
: The Jimmy Corporation issued a new series of bonds on January 1, 1996. The bonds were sold at par ($1000), have a 12% coupon rate, and mature in 30 years, on December 31, 2025. Coupon interest payments are made semi annually (on June 30 and December ..
|
|
General statement of an organization
: It is a general statement of an organization's overall purpose and philosophy. The statement explains why the entity exists. It focuses on today; what the organization is now. The statement is the foundation for all other planning. It should not b..
|
|
What is the effective interest rate of the combined mortgage
: A house can be purchased for $155,000, and you have $25,000 cash for a down payment. You are considering the following two financing options: What is the effective interest rate of the combined mortgage? Compute the monthly payments for each option o..
|
|
Define self-awareness
: Define self-awareness. Share an experience with a leader in your life who seemed self-aware and how that leader affected you.
|
|
Comparative advantage in producing cut flowers
: Which region appears to have a comparative advantage in producing cut flowers: Colombia or California? Explain. How have U.S. consumers of cut flowers been affected by the cutback in Colombian imports?
|
|
Diversity-related situation or cultural dilemma
: Identify and present attitudes, beliefs, cultural norms, or stereotypes that you identified within yourself when determining your position on the topic?
|
|
Use supply and demand curves-equilibrium price
: Use supply and demand curves to analyze increase/decrease for the following scenarios? i) shift ii) movement iii) equilibrium price iv) equilibrium quantity. Coffee prices soar due to a shortage of coffee beans. Market: Donuts. Prices for next year a..
|