Question
Your condo association has been apprised of the need for a new roof, estimates are $15,000,000 for this project. You own one condo and must
Your condo association has been apprised of the need for a new roof, estimates are $15,000,000 for this project. You own one condo and must pay your pro-rata share of the project, $115,000. The association provides you the option of a one-time payment of $115,000 or alternatively paying $998 per month for 15 years, payments made at the end of each month.
Solve for the implied monthly and annual nominal rates the condo association has arranged.
If instead you choose to finance the $115,000 yourself over the same period with monthly payments and arrange a 6.325% annual (nominal) rate, determine the loan origination fee break-even amount you can pay with the self financed option.
answer this 3rd part:
Solve for the break-even fee in dollars and consequently as percentage (%) of the loan amount. show both loan scenarios with complete loan amortization tables for all months. As both options (the condo association's financing and your self-financed option) will be financed over the same period, compare via total interest payments.
Step by Step Solution
3.40 Rating (150 Votes )
There are 3 Steps involved in it
Step: 1
Answer To solve this problem we need to find the implied monthly and annual nominal rates for the condo associations financing option and then calcula...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