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You want to buy a house which costs $550,000. Brokerage fees are 3.5% and you will put a down payment of 15% of the total
You want to buy a house which costs $550,000. Brokerage fees are 3.5% and you will put a down payment of 15% of the total cost. RBC quotes you a five-year fixed rate mortgage of 1.95%, you will amortize the mortgage over 25 years and will make monthly payments. a. If you make equal payments each month, what is the value? b. How much is left on the mortgage after the initial five year? c. If after the initial five years interest rate rise by 150 basis points, how long will it take you to pay off the mortgage assuming you continue to make the same payment as in part a? d. Two of the main types of decisions made by financial managers are the investment decision and the financing decision. Briefly outline and provide an example of each
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