A home mortgage is "under water" when the amount of money owed on it is much...
A home mortgage is "under water" when the amount of money owed on it is much greater than (say, twice) the market value of the home. Assume you have $10,000 equity in the home and your monthly payments are
$938.
Discuss the economic and ethical issues of walking away from (i.e., defaulting on) an underwater loan.
Total amount paid on loan for a year is?
Hence, it __(is or is not)__economically profitable to continue payments on mortgage loan.
Homework Answers
Monthly mortgage payment = $938
Calculate the total amount to be paid in a year -
Total amount paid = Monthly mortgage payment * 12
Total amount paid = $938 * 12 = $11,256
So,
The total amount paid on loan for a year is $11,256.
The equity or market value of home is $10,000 whereas we will have to pay $11,256 in annual mortgage payment.
Thus, liability exceeds the asset.
Hence,
It is not economically profitable to continue payments on the mortgage loan.
Add Answer to:
A home mortgage is "under water" when the amount of money owed
on it is much...
Total Loan amount: The total mortgage loan amount is the amount you borrow after paying your down payment. Here, we assumed that you would pay 20% of the home value (property value) as a down payment. 2. Months: The mortgage payment period is set to 30 ye
Total Loan amount: The total mortgage loan amount is the amount you borrow after paying your down payment. Here, we assumed that you would pay 20% of the home value (property value) as a down payment. 2. Months: The mortgage payment period is set to 30 years. In terms of months, this is equivalent to 30 years multiplied by 12 months. We put our primary basis of payments in terms of months, which is why we need to convert everything...
Your program will ask the user to enter the amount of money they want to borrow,...
Your program will ask the user to enter the amount of money they want to borrow, the interest rate, and the monthly payment amount. Your program will then determine how many months it will take to pay off that loan, what the final payment amount will be, and how much interest was paid over that time. If the monthly payment amount isn't high enough to pay off more than one month's interest, your program should notify the user what the...
Fleda's Beauty Company has $200,000 of total assets and earns 20 percent interest and taxes on...
Fleda's Beauty Company has $200,000 of total assets and earns 20 percent interest and taxes on these assets. The ratio of total debts to total assets (or DR been set at 50 percent. The interest rate on short-term debt is 7 percent, while the interest rate on long-term debt is 10 percent. A conservative policy calls for only long-term debt with no short-term debt; an intermediate policy calls for 50 percent short-term debt and 50 percent long-term debt; and an...
this is all the information given Personal Financial Planning Mini-Case Jeff and Mary Douglas, a couple...
this is all the information given
Personal Financial Planning Mini-Case Jeff and Mary Douglas, a couple in their mid-30s, have two children - Paul age 6 and Marcy age 7. The Douglas' do not have substantial assets and have not yet reached their peak earning years. Jeff is a general manager of a jewelry manufacturer in Providence, RI while Mary teaches at the local elementary school in the town of Tiverton, RI. The family needs both incomes to meet their...
For the following transactions, identify which principle, constraint, or assumption would apply: Assume a partnership’s business...
For the following transactions, identify which principle, constraint, or assumption would apply: Assume a partnership’s business is going to continue indefinitely. Based upon the dollar amount of cash paid or received, transactions are recorded. An accountant may ignore expense accounts with low dollar balances when deciding which expense accounts, they may want to increase spending on. Benefits of a new software system should be greater than the costs to implement the new software system. Business owners should keep their personal...
FISCAL POLICY IN THEORY: March, 2020: we are on the verge of Congress and the President...
FISCAL POLICY IN THEORY: March, 2020: we are on the verge of Congress and the President passing legislation that will empower the federal government to spend an unprecedented amount of EXTRA money not seen since World War 2 ---- in order to address the pandemic but also to help cushion the blow financially of perhaps ten or twenty million Americans --- or more --- losing their jobs, and thus suffering a drop in income. The scale of the 2020 recession...
ABC International: Solving the Rural Barrier
Compensation sessionABC International: Solving the Rural BarrierSource: Thunderbird School of Global Management, A unit of the Arizona State University Knowledge Enterprise. 2015. This case was prepared by Erin Bell under the guidance and supervision of Dr. Amanda Bullough, and revised and updated by Drew Helm for the purpose of classroom discussion only, and not to indicate either effective or ineffective managementSiham sat with her family and childhood friend, Leila, in their rural village of Qabatiya, Palestine. Leila had recently returned from...
A: China's makhle owe the country as we environmental problems. One of the trip is the...
A: China's makhle owe the country as we environmental problems. One of the trip is the yearly due ons which beroes the country. They po niskot business hills of dollar and leave parts of the typened in yellow dist. The problem severe's even affecting China's bors as well as t housalds of kill s The duoen om Marin May. Stwins pick up dins from the vast desert and plains of the newestem China and Moegli. The dirt is the carried...
Please read the article and answer about questions. You and the Law Business and law are...
Please read the article and answer about questions. You and the Law Business and law are inseparable. For B-Money, the two predictably merged when he was negotiat- ing a deal for his tracks. At other times, the merger is unpredictable, like when your business faces an unexpected auto accident, product recall, or government regulation change. In either type of situation, when business owners know the law, they can better protect themselves and sometimes even avoid the problems completely. This chapter...
Fleda's Beauty Company has $200,000 of total assets and earns 20 percent interest and taxes on these assets. The ratio of total debts to total assets (or DR been set at 50 percent. The interest rate on short-term debt is 7 percent, while the interest rate on long-term debt is 10 percent. A conservative policy calls for only long-term debt with no short-term debt; an intermediate policy calls for 50 percent short-term debt and 50 percent long-term debt; and an...
this is all the information given
Personal Financial Planning Mini-Case Jeff and Mary Douglas, a couple in their mid-30s, have two children - Paul age 6 and Marcy age 7. The Douglas' do not have substantial assets and have not yet reached their peak earning years. Jeff is a general manager of a jewelry manufacturer in Providence, RI while Mary teaches at the local elementary school in the town of Tiverton, RI. The family needs both incomes to meet their...
A: China's makhle owe the country as we environmental problems. One of the trip is the yearly due ons which beroes the country. They po niskot business hills of dollar and leave parts of the typened in yellow dist. The problem severe's even affecting China's bors as well as t housalds of kill s The duoen om Marin May. Stwins pick up dins from the vast desert and plains of the newestem China and Moegli. The dirt is the carried...
Most questions answered within 3 hours.
-
we discussed a number of factors in the "General (remote)
Environment" that can affect the...
asked 18 minutes ago -
Using the IS-PC-MR model, describe how the economy responds to
an inflation shock in the following...
asked 19 minutes ago -
Ammonium nitrate has been used as a high explosive because it is
unstable and decomposes into...
asked 23 minutes ago -
How long would it take a car with a top speed of 203 mph to travel...
asked 22 minutes ago -
9) What are the two different ways in which a user can interact
(interface/work) with UNIX?...
asked 26 minutes ago -
Exercise 2.5. Use the Binomial Theorem to prove that, for all n
≥ 0 and for...
asked 43 minutes ago -
The teachers at Bryan ISD want to examine if a newly developed
intervention program for disadvantaged...
asked 48 minutes ago -
Describe the
characteristics of small business.
- Name the most
common causes of small business failure....
asked 51 minutes ago -
A pendulum is made up of a small sphere of mass 0.500 kg
attached to a...
asked 1 hour ago -
Given a pn junction with both thin p-type and n-type materials
such that Wn and Wp...
asked 1 hour ago -
it was discussed that animals should be treated the same as
humans, that pain is pain,...
asked 1 hour ago -
The vapor pressure of water at 20°C is 17.54 torr. Calculate the
vapor pressure (in torr)...
asked 1 hour ago