A borrower has a $90000 loan with the "Easy-Credit" Finance Company. The loan is to be...
A borrower has a $90000 loan with the "Easy-Credit" Finance Company. The loan is to be repaid over 12 years via monthly payments at 7.4%/year compounded monthly. Just after the 36th payment, the borrower learns that his local bank would lend him money at 5.4%/year compounded monthly. Assuming that the contract stipulates an early repayment penalty equal to 3 months' interest on the outstanding balance at the time of refinancing, what would be the new monthly payment?
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A borrower has a $90000 loan with the "Easy-Credit" Finance
Company. The loan is to be...
Single payment loan repayment Personal Finance Problem A person bonows S120 to be repaid in 10...
Single payment loan repayment Personal Finance Problem A person bonows S120 to be repaid in 10 years with 11% amaly compo penalty The loan may be d iterest repaid athe end of any earier year wit, no prepayment a. What amount will be due if the loan is repaid at the end of year 22 b. What is the repayment at the end of year 4 a. The amount due i he loan is repaid at the and of yea...
Five years ago, Diane secured a bank loan of $380,000 to help finance the purchase of...
Five years ago, Diane secured a bank loan of $380,000 to help finance the purchase of a loft in the San Francisco Bay area. The term of the mortgage was 30 years, and the interest rate was 10% per year compounded monthly on the unpaid balance. Because the interest rate for a conventional 30-year home mortgage has now dropped to 7% per year compounded monthly, Diane is thinking of refinancing her property. (Round your answers to the nearest cent.) (A)...
Five years ago, Diane secured a bank loan of $310,000 to help finance the purchase of...
Five years ago, Diane secured a bank loan of $310,000 to help finance the purchase of a loft in the San Francisco Bay area. The term of the mortgage was 25 yr, and the interest rate was 6%/year compounded monthly on the unpaid balance. Because the interest rate for a conventional 25-yr home mortgage has now dropped to 4%/year compounded monthly, Diane is thinking of refinancing her property. How much less would Diane's monthly mortgage payment be if she refinances?...
Problem 3 (Required, 25 marks) Recently, Mr. A has 2 outstanding loans: • Loan A -...
Problem 3 (Required, 25 marks) Recently, Mr. A has 2 outstanding loans: • Loan A - He needs to repay $1720 at the end of every month and there are 36 repayments remaining. The loan charges interest at an annual nominal interest rate 12% compounded monthly Loan B - He needs to repay an amount X at the end of every month and there are 36 repayments remaining. The loan charges interest at an annual nominal interest rate 18% compounded...
4, Jim needs to borrow $500 for 60 days. Bank is offering to loan the money...
4, Jim needs to borrow $500 for 60 days. Bank is offering to loan the money at 9% bank discount rate. (a) What would be the maturity value on this loan? (b) What rate of simple discount would be equivalent to this loan? 5. A couple purchased a house and signed a mortgage contract for $350 000 to be paid in monthly installments over 25 year, at 3.5%. The contract stipulates that after 5 years the mortgage will be renegotiated...
1. (20 pts) Your finance company initiates mortgage loans to residential borrowers. Your company borrows money...
1. (20 pts) Your finance company initiates mortgage loans to residential borrowers. Your company borrows money at 2.5% APR compounded monthly. You initiate the mortgages to your customers at 6% APR compounded monthly. You then sell the mortgages to banks which will administer the loans. You charge a 10% commission on the present value of each mortgage when it is initiated. If you have just initiated a 30-year mortgage loan for $250,000... a. Show the cash flow diagram from the...
QUESTION 4 Chuck Ponzi has talked an elderly woman into loaning him $38,000 for a new...
QUESTION 4 Chuck Ponzi has talked an elderly woman into loaning him $38,000 for a new business venture. The elderly woman has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the S36.000 with a nominal interest rate of 12% compounded monthly over the next 10 years. She left the method of repayment up to Chuck a. Determine the cash flow to the woman if Chuck chooses the amortized loan method. Payments...
please show your calculations Question 2: What would be the effective rate on a personal loan...
please show your calculations
Question 2: What would be the effective rate on a personal loan in the amount of $20,000 with an annual rate of 6%? Assume it is a discounted loan and the borrower will repay the loan with one payment at the end of 12 months. Question 3: Calculate how much interest you would pay during the first 12 months if you were to borrow $10,000 at 6% to paid off in 5 years via monthly installments....
Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning...
Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $30,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $30,000 with an annual interest rate of 1 1% over the next 20 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of...
Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning...
Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $10,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $10,000 with an annual interest rate of 10% over the next 15 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of the...
Single payment loan repayment Personal Finance Problem A person bonows S120 to be repaid in 10 years with 11% amaly compo penalty The loan may be d iterest repaid athe end of any earier year wit, no prepayment a. What amount will be due if the loan is repaid at the end of year 22 b. What is the repayment at the end of year 4 a. The amount due i he loan is repaid at the and of yea...
Five years ago, Diane secured a bank loan of $310,000 to help finance the purchase of a loft in the San Francisco Bay area. The term of the mortgage was 25 yr, and the interest rate was 6%/year compounded monthly on the unpaid balance. Because the interest rate for a conventional 25-yr home mortgage has now dropped to 4%/year compounded monthly, Diane is thinking of refinancing her property. How much less would Diane's monthly mortgage payment be if she refinances?...
Problem 3 (Required, 25 marks) Recently, Mr. A has 2 outstanding loans: • Loan A - He needs to repay $1720 at the end of every month and there are 36 repayments remaining. The loan charges interest at an annual nominal interest rate 12% compounded monthly Loan B - He needs to repay an amount X at the end of every month and there are 36 repayments remaining. The loan charges interest at an annual nominal interest rate 18% compounded...
4, Jim needs to borrow $500 for 60 days. Bank is offering to loan the money at 9% bank discount rate. (a) What would be the maturity value on this loan? (b) What rate of simple discount would be equivalent to this loan? 5. A couple purchased a house and signed a mortgage contract for $350 000 to be paid in monthly installments over 25 year, at 3.5%. The contract stipulates that after 5 years the mortgage will be renegotiated...
1. (20 pts) Your finance company initiates mortgage loans to residential borrowers. Your company borrows money at 2.5% APR compounded monthly. You initiate the mortgages to your customers at 6% APR compounded monthly. You then sell the mortgages to banks which will administer the loans. You charge a 10% commission on the present value of each mortgage when it is initiated. If you have just initiated a 30-year mortgage loan for $250,000... a. Show the cash flow diagram from the...
QUESTION 4 Chuck Ponzi has talked an elderly woman into loaning him $38,000 for a new business venture. The elderly woman has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the S36.000 with a nominal interest rate of 12% compounded monthly over the next 10 years. She left the method of repayment up to Chuck a. Determine the cash flow to the woman if Chuck chooses the amortized loan method. Payments...
please show your calculations
Question 2: What would be the effective rate on a personal loan in the amount of $20,000 with an annual rate of 6%? Assume it is a discounted loan and the borrower will repay the loan with one payment at the end of 12 months. Question 3: Calculate how much interest you would pay during the first 12 months if you were to borrow $10,000 at 6% to paid off in 5 years via monthly installments....
Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $30,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $30,000 with an annual interest rate of 1 1% over the next 20 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of...
Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $10,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $10,000 with an annual interest rate of 10% over the next 15 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of the...
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