Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please provide step by step guide without using excel and use financial calculator Problems 7 - 1 0 are based on the following information:You ve

Please provide step by step guide without using excel and use financial calculator
Problems 7-10 are based on the following information:Youve just bought a house and took a $300,000 mortgage that you plan to repay in equal monthly payment of $3,159.67 during the next 25 years starting next month (i.e., you will make a total of 300 monthly payments). The monthly interest rate is 1%
Problem 7:How much of your SECOND payment will be interest?
A) $2996B) $2997C) $2998D) $2999E) $3000Ans: C
Problem 8:What will be your balance 5 years from now (right after your 60th payment)?
A) $110420B) $240000C) $275674D) $281816E) $286959
Ans: E
Problem 9:If 10 years from now you will make a pre-payment (an extra payment in addition to your regular 120th payment) of $20,000 by how many months (rounded to the closest integer) will it decrease the length of your mortgage?
A)6 monthsB)11 monthsC)17 monthsD)19 monthsE)32 months
Ans: E
Problem 10:If 10 years from now you will make a pre-payment (an extra payment in addition to your regular 120th payment) of $20,000 by how much such prepayment will decrease your outstanding balance 17 years from now (at the time of your 204th payment)?
A) $24,387B) $36,334C) $46,134D) $52,364E) $66,007
Ans. C

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

International Financial Management

Authors: Jeff Madura

7th Edition

0324071744, 978-0324071740

More Books

Students also viewed these Finance questions

Question

Identify ways to increase your selfesteem.

Answered: 1 week ago