Question

8. Mortgages: a. What is the period interest rate on a mortgage with a 4.8% APR compounded semiannually?

b. A certain family can afford a monthly mortgage payment of $1,340.00. With an APR of 5.25% per annum, what is the maximum mortgage amount they can afford if they prefer a 20-year amortization period? N = I% = PV = PMT = FV = P/Y = C/Y = PMT: END BEGIN

c. The Lees have purchased a new home for $360,000, and put a down payment of $50,000 on it. They have a mortgage for the balance, amortized over 20 years at 5.25%. If the Lees pay off the mortgage at the end of the 20 years, how much interest will they have paid in total?

d. A family has a mortgage on a home for $295,000, amortized over 25 years, at an APR of 4.5%. The monthly payment on the mortgage is $1,639.71/ If the family makes a $25,000 extra payment at the end of the 4th year of the mortgage, how much interest will they save by the end of the 25-year period of the mortgage? Hint: Assume the monthly payment is adjusted at the end of the 4th year, to keep the original amortization of 25 years. N = I% = PV = PMT = FV = P/Y = C/Y = PMT: END BEGIN N = I% = PV = PMT = FV = P/Y = C/Y = PMT: END BEGIN

Answer 1

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SOLVED WITH BA II PLUS CALCULATOR

C w ? ENG 09:07 31-07-2020 99+ 30 Х CS18 . CK CL CM CN CO CP СО CR CS CT CU CV CW CL 1 2 BA II PLUS 3 4 a APR 4.80% COMPOUNDED SEMI ANNUALLY 5 6 ANSWER PERIODIC INTEREST RATE = 2.40% [4.8%/2] 7 8 b N = 9 1% = 240 [20 X 12] 5.25 198859.03 [MAXIMUM MORTGAGE AMOUNT] - 1340 CPT PV = 10 ANSWER 11 PMT = 0 12 13 12 FV = P/Y= C/Y= PMT: END 14 [2 15 16 17 18 19 20 21 22 23 24 NPV ASTRO UNDER BOND Sheet3 REAL RETURN TABLE APPENDIX CUMIPMT PV FVstate Sheet4 PV FV PRICE YTM chc ...

C w ENG 09:08 31-07-2020 99+ 30 Х CL31 . CK CL CM CN СО CP СО CR CS СТ CU CV CW CA с N = 16 17 18 19 1% = PV = 240 [20 X 12] 5.25 -310000.00 2088.92 CPT PMT = 0 20 21 22 23 24 12 FV = P/Y= C/Y= PMT: END 12 25 26 27 28 TOTAL AMOUNT PAID = LESS : LOAN AMOUNT = ANSWER TOTAL INTEREST PAID = 501340.8 [2088.92 X 240] 310000 191340.8 29 30 31 32 33 34 35 36 37 38 39 NPV ASTRO UNDER BOND Sheet3 REAL RETURN TABLE APPENDIX CUMIPMT PV FVstate Sheet4 PV FV PRICE YTM chc ...

C w ENG 09:09 31-07-2020 99+ 30 Х CQ49 . CK CL CM CN СО CP СО CR CS СТ CU CV CW C4 29 d LOAN BALANCE AT THE END OF 4TH YEAR 30 31 32 N = 33 1% = 252 [21 X 12] 5.25 250045.71 [LOAN BALANCE] -1639.71 34 CPT PV = 35 PMT = 36 0 12 37 38 FV = P/Y= C/Y= PMT: END 12 39 40 NOW 25000 EXTRA PAYMENT AT THE END OF 4TH YEAR SO LOAN BALANCE NOW = 250045.71 - 25000 = 225045.71 41 42 43 44 N = 252 [21 X 12] 4.5 45 1% = PV = 46 47 -225045.71 1382.04 CPT PMT = 48 0 49 12 FV = P/Y= C/Y= PMT: END 12 50 51 52 NPV ASTRO UNDER BOND Sheet3 REAL RETURN TABLE APPENDIX CUMIPMT PV FVstate Sheet4 PV EV PRICE YTM chc ...

C w ENG 09:09 31-07-2020 99+ 30 Х CQ66 . CK CL CM CN СО CP СО CR CS СТ CU CV CW C- 43 44 N = 45 1% = PV = 252 [21 X 12] 4.5 -225045.71 1382.04 46 CPT PMT = 47 48 0 49 12 FV = P/Y= C/Y= PMT: END 50 12 51 52 53 54 55 TOTAL AMOUNT PAID WITH 1639.71 FOR 21 YEARS= 413206.92 [1639.71 X 252] TOTAL AMOUNT PAID WITH 1382.04 FOR 21 YEARS= 348274.08 (1382.04 X 252] ANSWER TOTAL AMOUNT OF INTEREST SAVED = 64932.84 56 57 58 59 60 61 62 63 64 65 66 NPV ASTRO UNDER BOND Sheet3 REAL RETURN TABLE APPENDIX CUMIPMT PV FVstate Sheet4 PV FV PRICE YTM chc ...