1) Following are the features of a mortgage loan:
Loan amount $100,000
Nominal interest rate 6.2%
Term – 30 years (Fixed)
Required:
(a) Calculate the required monthly mortgage payment.
(b) Calculate the amount of interest and the repayment of principal amount for the first month.
2) Consider the two bonds as given below:
1) Following are the features of a mortgage loan: Loan amount $100,000 Nominal interest rate 6.2%...
1) The yield on a corporate bond is 12%, and it is currently selling at par. The marginal tax rate is 20%. A par value municipal bond with a coupon rate of 10% is available. Which security is a better buy? 2) Following are the features of a mortgage loan: Loan amount $100,000 Nominal interest rate 6.2% Term – 30 years (Fixed) Required: (a) Calculate the required monthly mortgage payment. (b) Calculate the amount of interest and the repayment of...
A high-yield bond has the following features: __________________________________________________ Principal amount: $1,000 Interest rate (the coupon): 11.50% Maturity: 10 years Sinking fund: None Call feature: After two years Call penalty: One year’s interest ___________________________________________________ a.) If comparable yields are 12 percent, what should be the price of this bond? b.) Would you expect the firm to call the bond if yields are 12 percent? c.) If comparable yields are 8 percent, what should be the price of the bond? d.) Would...
ii. Frank Lewis has a 30-year, $100,000 mortgage with a nominal interest rate of 10 percent and monthly compounding. Which of the following statements regarding his mortgage is most correct? a. The monthly payments will decline over time. b. The proportion of the monthly payment that represents interest will be lower for the last payment than for the first payment on the loan. c. The total dollar amount of principal being paid off each month gets larger as the loan...
Frank Lewis has a 30-year, $100,000 mortgage with a nominal interest rate of 10 percent and monthly compounding. Which of the following statements regarding his mortgage is most correct? a. The monthly payments will decline over time. b. The proportion of the monthly payment that represents interest will be lower for the last payment than for the first payment on the loan. c. The total dollar amount of principal being paid off each month gets larger as the loan approaches...
15. 10 years ago, Alan started to repay a loan by making equal month-end repayments of $3,200 for 15 years. If the interest rate charged for the loan is 12% per annum compounded monthly, the loan outstanding immediately after the 120th payment is closest to A. $125,430 B. $138,420 C. $142,440 D. $143,860 16. Andrew's monthly instalment made in arrears to repay his loan fully is $4,500. If the effective for the loan is 0.3%, calculate the amount of the...
(4 points) Consider a 2-year mortgage loan that is paid back semi-annually. The semi-annually compounded mortgage rate is 5%. The principal is $1000. a) (1 point) Calculate the semi-annual coupon. b) (3 points) How much of the coupon is interest payment and how much is principal repayment in 0.5 year, in 1 year, in 1.5 years, and in 2 years? Also calculate the (post- coupon) notional value of the outstanding principle for these four dates. (4 points) Consider a 2-year...
In a fixed-rate mortgage amortization schedule of monthly mortgage payments A. The amount of interest in each payment is equal to the amount of principal paid B. Both B and C are true C. In the early years, principal repayment exceeds interest payments D. In the early years, interest payments exceed principals repayments
7. Ali buys a new car and finances it with a loan of 22,000. He will make n monthly payments of 450.30 starting in one month. He will make one larger payment in n + 1 months to pay off the loan. Payments are calculated using an annual nominal interest rate of 8.4%, convertible monthly. Immediately after the 18th payment he refinances the loan to pay off the remaining balance with 24 monthly payments starting one month later. This refinanced...
A thirty year monthly payment mortgage loan for 500,000 is offered at a nominal rate of 8.4% convertible monthly. Find the a) monthly payment, b) the total principal and interest that would be paid on the loan over 30 years c) the balance in 5 years and d) the principal and interest paid over the first 5 years.
A 30-year mortgage has an annual interest rate of 5.25 percent and a loan amount of $175,000. What are the monthly mortgage payments? (Round your answer to 2 decimal places.) Payment A 30-year mortgage has an annual interest rate of 4.65 percent and a loan amount of $225,000. (Hint: Use the "IPMT" and "PPMT" functions in Excel.) What are the interest and principal for the 84th payment? (Round your answers to 2 decimal places.) Interest Principal A 20-year mortgage has...