Question
Jonathan just bought an apartment in California which cost $ 10 million. The down payment was 30%, and the balance of his mortgage was $7
- Jonathan just bought an apartment in California which cost $ 10 million. The down payment was 30%, and the balance of his mortgage was $7 million. The borrowing interest rate is 3%. The term is 30 years. (60 points)
- Please fill this table. (20 points)
| At the end of the first month | At the end of the second month |
Beginning month balance |
|
|
Interest payment |
|
|
Principal payment |
|
|
Remaining balance after the payment |
|
|
- Assume no prepayment. What is the Macaulay duration of this mortgage loan? (Note. The calculation can be done using Excel. On the exam, I will not ask you this type of calculation. But I may ask you to write down the procedures.) (40 points)
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
