Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 19, 2020

A couple takes out a fully amortizing fixed rate thirty-year loan for $375,000. The couple makes monthly payments and the annual interest rate on the

A couple takes out a fully amortizing fixed rate thirty-year loan for $375,000. The couple makes monthly payments and the annual interest rate on the loan is 4.5%. The couple also pays 3 points in up- front fees to obtain the loan.

(a) Calculate the loan’s APR

(b) Assuming a holding period of 12 years, calculate the loan’s EBC

Step by Step Solution

★★★★★

3.46 Rating (153 Votes )

There are 3 Steps involved in it

Step: 1

Sol Loan amount 375000 Interest rate r 45 Monthly payment 4512 03745 Period ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Derivatives And Risk Management

Authors: Don M. Chance, Robert Brooks

10th Edition

130510496X, 978-1305104969

More Books

Students also viewed these Finance questions

Question

★★★★★

Monthly payments were originally calculated to repay a $20,000 loan at 9% compounded monthly over a 10-year period. After one year, the debtor took advantage of an option in the loan contract to...

Answered: 1 week ago

Question

★★★★★

A $198 000 mortgage amortized by monthly payments over 20 years is renewable after 5 years. Interest is 4.65% compounded semi-annually. (a) What is the size of the monthly payments? (b) How much...

Answered: 1 week ago

Question

★★★★★

On January 15, a firm takes out a loan of $30 million, with interest payments to be made on April 16, July 15, October 14, and the following January 15, when the principal will be repaid. Interest...

Answered: 1 week ago

Question

★★★★★

Compare the hoop stress (r,/2) predictions from elasticity with voids given by relation (15.5.18) with the corresponding results from classical theory. Choosing N = 1/2 and L = 2, for the elastic...

Answered: 1 week ago

Question

★★★★★

Z Corporation provides free parking only to its president. Parking costs other employees $175 a month. What is the tax impact to the president?

Answered: 1 week ago

Question

★★★★★

Assume that on January 1, 2011, Peking Duck Co. sells a computer system to Liquidity Finance Co. for 510,000 and immediately leases the computer system back. The relevant information is as follows....

Answered: 1 week ago

Question

★★★★★

The percentage of the population in a city who suffer from a serious disease is 3%. A person has just taken two medical examinations to see whether he suffers from the disease. Each of the two tests...

Answered: 1 week ago

Question

★★★★★

Elise Lovejoy, the new logistics coordinator at Spartan Plastics was looking at issue of how to get increasing shipping costs under control. Currently, the firm was servicing three major customers by...

Answered: 1 week ago

Question

★★★★★

Question 24 0.5 pts What are the five variables (in their initials, as an acronym formula) to consider in a forward looking financial statement analysis? O "TTRMM" O "TTRRM" "TRRMM No answer text...

Answered: 1 week ago

Question

★★★★★

Imogen runs the Manor Park Hotel in Powys, Wales. She purchased the 50-bedroom hotel 10 years ago. She is wondering if the business is trading as well as it could be and would like a report stating...

Answered: 1 week ago

Question

★★★★★

The shareholders' equity of Bodie Company on January 1, 2017, included the following: Common stock, $1.6 par; authorized, 800,000 shares; You will need to calculate the issued shared $229,238 Paid-in...

Answered: 1 week ago

Question

★★★★★

F9.3 VEN Find the internal forces (N. V. M) at the halfway point between points A and C. A 30 lb, B = 225 lb-ft and C = 110 lb, as shown. A 45.0 B CI +4 0.600 ft 0.800 ft 0.600 ft 3. 7K

Answered: 1 week ago

Question

★★★★★

Answered: 1 week ago

Question

★★★★★

EDUCAUSE, in partnership with 2Revolutions, published a report in 2015 entitled "Building a Culture of Innovation in Higher Education: Design and Practice for Leaders." Download "Building a Culture...

Answered: 1 week ago

Question

★★★★★

While we briefly touched upon some forecasting in the class in terms of correlations (if you remember back in Week 4), I did want to provide two additional stories on forecasting and that is...

Answered: 1 week ago

Question

★★★★★

Draw a 3-level diagram of the network, operations, and process levels within your own workplace.

Answered: 1 week ago

Question

★★★★★

Martha and Lew are married tax payers with $1500 of foreign tax withholding from dividends in a mutual fund. They have enough foreign income from the mutual fund to claim the for $1500 as a foreign...

Answered: 1 week ago

Question

★★★★★

What are the two methods used to translate financial statements and how does the functional currency play a role in determining which method is used?

Answered: 1 week ago

Question

★★★★★

Why does the justification for exercising an American call early not hold up when considering an American put? The following option prices were observed for a stock on July 6 of a particular year....

Answered: 1 week ago

Question

★★★★★

The binomial option pricing model has several advantages, particularly related to illustrating important concepts and practical applications. Identify and discuss three advantages related to...

Answered: 1 week ago

Question

★★★★★

Why is hedge accounting used, and how can it be misused?

Answered: 1 week ago

Question

★★★★★

17. What procedure is most promising for treating musicians cramp?

Answered: 1 week ago

Question

★★★★★

14. Under what circumstance would the occipital cortex of a sighted adult become responsive to touch?

Answered: 1 week ago

Question

★★★★★

18. Under what circumstances are adolescents most likely to make an impulsive decision?

Answered: 1 week ago

Previous Question Next Question