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Please show work for this problem so I know how you got the answers, Thanks! 1) A mortgage loan of $1,875,000 has just been made
Please show work for this problem so I know how you got the answers, Thanks!
1) A mortgage loan of $1,875,000 has just been made on a property valued at $2,500,000. The interest rate is 6% with 2 points. The loan will require level monthly payments to amortize the principal over 25 years. The mortgage also carries a 1% prepayment penalty.
a. What is the indicated loan-to-value ratio?
b. What is the monthly mortgage payment?
c. How much interest is paid in the fifth year?
d. If the mortgage is paid off after 7 years what will the effective yield be?
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