ZuoTi.Pro
Question

You purchased a house five years ago and borrowed $300,000 . The loan you used has...

You purchased a house five years ago and borrowed $300,000 .
The loan you used has 300 more monthly payments of $1,610 each, starting next month, to pay off the loan.
You can take out a new loan for $275,486 at 4.00% APR compounded monthly , with 300 more payments, starting next month to pay off this new loan.
and pay off the old loan. If your investments earn 2.75% APR compounded monthly , how much will you save in present value terms by using the new loan to pay-off the original loan?
There may be rounding in this case , so pick the closest answer.

Answers:

34,447

$31,851

$33,791

$32,807

$35,481

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

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
You purchased a house five years ago and borrowed $300,000 . The loan you used has...
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

  • You purchased a house five years ago and borrowed $300,000 from a bank to buy the...

    You purchased a house five years ago and borrowed $300,000 from a bank to buy the house. The loan you used has 300 more monthly payments of $1,610 each, starting next month, to pay off the loan. You can take out a new loan for $270,000 and pay off the original loan. The new loan has an interest rate of 4% APR compounded monthly , with 300 more payments, starting next month to pay off this new loan. If your...

  • A $26,000 loan borrowed 5 years ago, has been scheduled for re-pay starting today. The payment...

    A $26,000 loan borrowed 5 years ago, has been scheduled for re-pay starting today. The payment schedule is equal monthly payments made at the end of every month for the next 10 years. Find the size of the payments if interest is 3.6% p.a. compounding monthly

  • You borrowed $20,000 one year ago. The loan terms are: 5-year loan with APR of 24%...

    You borrowed $20,000 one year ago. The loan terms are: 5-year loan with APR of 24% compounded monthly. There are 3 questions to answer for this problem. In your answers, do not use the $ sign, use comma to separate thousands, and round to the nearest dollar. 1. What is the monthly payment for this loan? 2. What is the loan balance today? 3. Today, you decide you want to pay off the loan in 20 months rather than the...

  • You plan to buy a house in 18 months. The cost of the house at that...

    You plan to buy a house in 18 months. The cost of the house at that time will be $300,000 . How much do you have to invest each month, starting next month, for 12 months to exactly pay for the house if you r investments earn 2.00% APR (compounded monthly)? $22,675 $25,261 $24,525 $23,582 $24,290

  • Five years ago you borrowed $230,000 to finance the purchase of a $290,000 house. The interest...

    Five years ago you borrowed $230,000 to finance the purchase of a $290,000 house. The interest rate on the old mortgage is 5.5%. Payment terms are being made monthly to amortize the loan over 30 years. You have found another lender who will refinance the current outstanding loan balance at 3.5% with monthly payments for 25 years. There are no prepayment penalties associated with either loan. You feel the appropriate refinancing cost is 5% of the new loan amount. a....

  • please show all steps 2. You have borrowed a loan form bank for $400,000 to finance...

    please show all steps 2. You have borrowed a loan form bank for $400,000 to finance a new house. You are required to repay the loan in 360 equal monthly payments starting at the end of month 1. The bank charges an interest rate of 3% APR, compounded monthly. (i) What is the reduction in repayment time if you decide to add $400 to each payment? What is the remaining balance of the loan after 120 payments under (ii) the...

  • Question 5 Ten years ago you borrowed $258000. The term of the loan was 23 years...

    Question 5 Ten years ago you borrowed $258000. The term of the loan was 23 years and required monthly payments of $2756.90. The interest rate on the loan was 12 percent compounded monthly. You have just made the 138th payment. What is the principal outstanding? $190069.34 $171546.34 $129000.00 $205855.27

  • When you purchased your house 4 years ago, you took out a $300,000, 30 year FRM loan at 7.5%. You also paid 2 points to...

    When you purchased your house 4 years ago, you took out a $300,000, 30 year FRM loan at 7.5%. You also paid 2 points to get this loan. Now you want to sell your house and buy another one. In order to do so, you must pay off the existing one. The loan came with 1% prepayment penalty. What has been your effective interest rate on this loan? (show work)

  • You borrowed $70,000 in student loans. You plan to make monthly payments to repay the debt....

    You borrowed $70,000 in student loans. You plan to make monthly payments to repay the debt. The interest rate is fixed at 3.3% APR (with monthly compounding). a) If the loans are for 10 years, find the monthly payment. b) Suppose that you decide to pay $300 more per month instead of the required monthly payment. How long will it take to pay off the loan?

  • When you purchased your house 4 years ago, you took out a $300,000, 30 year FRM...

    When you purchased your house 4 years ago, you took out a $300,000, 30 year FRM loan at 7.5%. You also paid 2 points to get this loan. Now you want to sell your house and buy another one. In order to do so, you must pay off the existing one. The loan came with 1% prepayment penalty. What has been your effective interest rate on this loan? (show work)(use financial calculator)

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
Active Questions
ADVERTISEMENT