An interest-only mortgage is made for $88,000 at 9 percent interest for 16 years. The lender and
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Question:
An interest-only mortgage is made for $88,000 at 9 percent interest for 16 years. The lender and borrower agree that monthly payments will be constant and will require no loan amortization.
Required:
a. What will the monthly payments be?
b. What will be the loan balance after five years?
c. If the loan is repaid after five years, what will be the yield to the lender?
d. Instead of being repaid after five years, what will be the yield if the loan is repaid after 10 years?
Related Book For
Real Estate Finance and Investments
ISBN: 978-0073377339
14th edition
Authors: William Brueggeman, Jeffrey Fisher
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