Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I solved for the first four but am struggling on the rest. You are buying a house and the mortgage company offers to let you
I solved for the first four but am struggling on the rest. You are buying a house and the mortgage company offers to let you pay a "point" (1.0% of the total amount of the loan) to reduce your APR from 5.86% to 5.61% on your $421,000, 30-year mortgage with monthly payments. If you plan to be in the house for at least five years, should you do it? (Note: Be careful not to round any intermediate steps less than six decimal places.) The monthly mortgage payment at 5.86% APR is $2,486.34. (Round to the nearest cent.) The monthly mortgage payment at 5.61% APR is $ 2,419.53(Round to the nearest cent.) The lower interest rate on the mortgage results in monthly savings of $ 66.81. (Round to the nearest cent.) The PV of the monthly savings is $3,467.53. (Round to the nearest cent.) The balance of the mortgage at the end of five years at 5.86% APR is $1. (Round to the nearest cent.) The balance of the mortgage at the end of five years at 5.61% APR is $(Round to the nearest cent.) The principal reduction due to the lower interest rate is $. (Round to the nearest cont.) The PV of the principal reduction is $ 1). (Round to the nearest cent.) The net benefit or cost is $ (Round to the nearest cent.) The net benefit is ; therefore, you pay the point. (Select from the drop-down menus.)
I solved for the first four but am struggling on the rest.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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