Consider the following mortgage: amount = $234,000; 30 years (monthly compounding); k = 0.055. What is the interest expense associated with the first payment?
Determine the amount of interest expense on a 30-year mortgage of $234,000 with an interest rate of 5.5 percent assuming monthly compounding associated with the last payment (end of month payments).
What will be the mortgage balance remaining on a loan of $234,000 with a 35-year term (monthly compounding) and k = 0.055 after the 21st end-of-month payment?
Obtain the total interest paid during the last ten years of a $535,000 mortgage when n = 20 and k = 7.5%, assuming monthly compounding (end of month payments).
What is the effective yield on a 35-year fixed rate mortgage if 12 points are charged and the nominal interest rate is 5.75%, assuming monthly compounding? Use the approximation formula!
Mr. Fernandez has applied for a revolving credit line of $6 million to assist in marketing a new product line. The terms of the loan will be as follows:
(a) All the loans will be discount loans. (b) A commitment fee of 0.2 percent on the unused portion of the loan will be charged. (c) The compensatory balance requirements will be 10 percent on the total credit line and 8 percent on the outstanding loans. (d) The bank will pay 4 percent interest on demand deposits. (e) The rate of interest to be charged will be the prime rate plus 3 percent. (f) The bank will use the "actual/360" accrual method to compute interest payments. (g) The credit line will be extended for a period of three years.
The loan officer estimates that Mr. Fernandez will use about 60 percent of the credit line on average. If the prime rate is 10 percent and the required reserve rate on demand deposits is 20 percent, compute the effective yield for the bank.
Mr. Fernandez has applied for a revolving credit line of $6 million to assist in marketing a new product line. The terms of the loan will be as follows:
(a) All the loans will be discount loans. (b) A commitment fee of 0.2 percent on the unused portion of the loan will be charged. (c) The compensatory balance requirements will be 10 percent on the total credit line and 8 percent on the outstanding loans. (d) The bank will pay 4 percent interest on demand deposits. (e) The rate of interest to be charged will be the prime rate plus 3 percent. (f) The bank will use the "actual/360" accrual method to compute interest payments. (g) The credit line will be extended for a period of three years.
The loan officer estimates that Mr. Fernandez will use about 60 percent of the credit line on average. If the prime rate is 10 percent and the required reserve rate on demand deposits is 20 percent, what is the effective cost to Mr. Fernandez?
You borrow a $345,000 add-on interest loan from the LOL credit union and will repay in equal installments over 12 years. The nominal rate of interest is 4.75%. Assuming weekly repayment and compounding rate of interest, obtain the equal weekly payments.
You borrow a $345,000 add-on interest loan from the credit union and will repay in equal installments over 12 years. The nominal rate of interest is 4.75%. Assuming quarterly repayment and simple rate of interest, obtain the equal quarterly payments.
Miss Sun Tzi obtained a level principal and interest on the balance loan of $7,541,000. The nominal rate of interest is 0.9% with a term of 5 years and payments scheduled at the end of each month. Compute the 12th payment.
Obtain the principle amount repaid during the last ten years of a $535,000 mortgage when n = 20 and k= 7.5%, assuming monthly compounding (end of month payments). (Hint: for the faster calculation, you can obtain the principle by calculating MP x 120 Answer for Question 15)
