Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ASSIGNMENT VERSION #4 Assume that your group represents the Credit Manager of a North Vanco Union and that Mr. Wayne Gretski, on his way through

image text in transcribed
ASSIGNMENT VERSION #4 Assume that your group represents the Credit Manager of a North Vanco Union and that Mr. Wayne Gretski, on his way through Vancouver to has asked that you analyze the history of his previous and current mortgage the 2022 Olympics, transactions. a) Exactly 10 years ago, Mr. Wayne Gretski purchased a beautiful condo at Whisd at the Whistler for was mortgaged at the over 25 S795,000 and made a down payment of S215,000. The balance Canada Bank at 4.35% compounded semi-ann years. The interest rate was fixed for a 5 year term, and lump sum paymentsv allowed at the end of each 5 years without penalty. ually with monthly payments e the monthly payment for the first 5 years. ROUND UP TO THE NEXT CENT Construct an amortization schedule for the first 60 months. (A schedule showing only the first 3 months, and months 57 to 60 inclusive, with 60 month totals is also required.) ulate the principal outstanding at the end of the first 5 years. What percentage of the first five years total monthly payments went to reduction of the debt, and what percentage went to interest? What percentage of the debt has been paid off by the first five years of payments? iv) v) years ago, Wayne made a lump-sum payment of $195,000 (in addition to the regular payment), and the interest rate was also changed to 5.05% compounded semi-annually i) ii) Calculate the amount being refinanced. Calculate the monthly payment for the second 5 year period. ROUND UP TO THE NEXT DOLLAR ii) How much total interest did Wayne pay in the past two years? c) Wayne's mortgage has just come up for further renewal. He has decided to take advantage of your relatively low rates and wishes to investigate tranferring it to your North Vancouver Credit Union branch that charges 5.45% compounded monthly, payable over 15 years. i) Calculate the size of the principal balance being refinanced. i) Calculate the size of the new monthly payment. ii) Wayne seems amazed that he has only repaid a small fraction of his original loan. You will draw a large scale, fully labelled graph that visually explains to Wayne how the loan has been amortized over the past ten (10) years. You are only expected to plot the annual balances owing

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

blur-text-image_2

Step: 3

blur-text-image_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

The Professional Risk Managers Guide To Financial Market Bond Markets

Authors: Professional Risk Managers' International Association (PRMIA)

1st Edition

0071738932

More Books

Students also viewed these Finance questions

Question

8. Explain the credit risk management mechanisms used by MFIs.

Answered: 1 week ago

Question

Write a short note on rancidity and corrosiveness.

Answered: 1 week ago