ZuoTi.Pro
Question

1.Your auto insurance premium of $2200 is due today. You insurance company is giving you the...

1.Your auto insurance premium of $2200 is due today. You insurance company is giving you the "easy financing" option of making 12 monthly payments, with the 1st payment starting today. The interest rate on this financing option is 17.00% with monthly compounding. What's the monthly payment amount?

Final answer would be 197.85.

2.A young couple decide to take advantage the current first-time home buyer credit and buy a new house. With their combined income, they can afford to make a maximum of $850 monthly payment. With their credit history, they can borrow a 30-year fixed rate mortgage loan at 6.7% (mortgage loans compound monthly). What's the maximum amount they can borrow?

Hint for Q2: Final answer would be 131726.18

Please note that I tried to use excel in order to find the payment for Q1 and I got 200.65

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Loan:J(1-(1/(1+r^ n)))/r] 2,200+[((1-(1/1.014167^12)))/0.014167 ] $197.85 Monthly payment-pmt = =

answered by: ANURANJAN SARSAM
0 0
Add a comment
Know the answer?
Add Answer to:
1.Your auto insurance premium of $2200 is due today. You insurance company is giving you the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • (6 points) Your brother is considering the purchase of a home rather than renewing the lease...

    (6 points) Your brother is considering the purchase of a home rather than renewing the lease on his two-bedroom apartment. He is currently paying $1050 per month for rent. He has asked you to help decide what sort of home he might be able to afford with his current monthly rent payment. His bank offers first-time home buyers (with good credit) a 10-year mortgage at a fixed rate of 6.4 %. Use this information to answer the questions below Express...

  • You have an annual salary of $72,000 and the bank is willing to allow your monthly...

    You have an annual salary of $72,000 and the bank is willing to allow your monthly mortgage payment to be equal to 29% of your monthly income.The interest rate on the loan is 6% per year with monthly compounding for a 30 year fixed rate loan. What is the maximum amount you can borrow from the bank? A) 258,925 B) 277,499 C) 280,210 D) 290,217 E) 491,075

  • How to calculate the content of green grid? Thank you 13. You have reviewed your budget...

    How to calculate the content of green grid? Thank you 13. You have reviewed your budget and determined that you can afford to pay $300 per month as a car payment. How much can you borrow if your credit is good and the interest rate is 4 percent using a 48 month loan? How much can you borrow if your credit is bad and the interest rate is 8 percent using the same loan term? This problem is similar to...

  • Develop a spreadsheet model to determine how much a person or a couple can afford to...

    Develop a spreadsheet model to determine how much a person or a couple can afford to spend on a house. Lender guidelines suggest that the allowable monthly housing expenditure should be no more than 28​% of monthly gross income. From​ this, you must subtract total nonmortgage housing​ expenses, which would include insurance and property taxes and any other additional expenses. This defines the affordable monthly mortgage payment. In​ addition, guidelines also suggest that total affordable monthly debt​ payments, including housing​...

  • Alan recently joined Friendly Investment and Financing Options (FIFO) as a loan officer. FIFO is a...

    Alan recently joined Friendly Investment and Financing Options (FIFO) as a loan officer. FIFO is a national company that specializes in mortgage lending. One of Alan’s responsibilities is to increase the amount of mortgages FIFO initiates. In a meeting he had with the CEO yesterday, Alan was told about a new mortgage that FIFO intends to market. The new mortgage is called an option adjustable rate mortgage, or an option ARM for short, and its most attractive feature is that...

  • do I have it right Part 1: Mortgage A mortgage is a loan used to purchase...

    do I have it right Part 1: Mortgage A mortgage is a loan used to purchase a home. It is bedover a period of 1,20 or 30 years. The interest rate is determined by the term of the l e ngth of time to pay back the loan) and the credit rating of the person borrowing the money Once a person signs the documents to borrow money for a home the presented we amortization table or schedule for the mortgage...

  • Assume that you have a 30 year fully-amortized fixed rate mortgage for your home. Your loan...

    Assume that you have a 30 year fully-amortized fixed rate mortgage for your home. Your loan amount is $300,000 with a 3% annual interest rate. After 28 years, you would like to sell the property. What is your loan balance at the end of 28 years? Assume that you have a 30 year fully-amortized fixed rate mortgage for your home. Your loan amount is $300,000 with a 3% annual interest rate and your balloon payment is $50,000. What is your...

  • Can Abigail and Alexander Afford This Home Using the Installment Debt Loan Criterion? Next week, your...

    Can Abigail and Alexander Afford This Home Using the Installment Debt Loan Criterion? Next week, your friends Abigail and Alexander want to apply to the Third Universal Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $215,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. (Note: When completing the form, round each dollar amount to the nearest whole dollar.) To...

  • You are planning to purchase a house that costs $480,000. You plan to put 20% down and borrow the...

    You are planning to purchase a house that costs $480,000. You plan to put 20% down and borrow the remainder. Based on your credit score, you believe that you will pay 3.99% on a 30-year mortgage. Use function “PMT” to calculate your mortgage payment. Use function “PV” to calculate the loan amount given a payment of $1700 per month. What is the most that you can borrow? Use function “RATE” to calculate the interest rate given a payment of $1700...

  • Mortgage Analysis You are planning to purchase a house that costs $480,000. You plan to put...

    Mortgage Analysis You are planning to purchase a house that costs $480,000. You plan to put 20% down and borrow the remainder. Based on your credit score, you believe that you will pay 3.25% on a 30-year mortgage. (Use Excel) Use function “PMT” to calculate your mortgage payment. Use function “PV” to calculate the loan amount given a payment of $1550 per month. What is the most that you can borrow? Use function “RATE” to calculate the interest rate given...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT