Question

D) 7.9% You are considering purchasing a new home. You will need to borrow $270,000 to purchase the home. A mortgage company offers you a 20- year fixed rate mortgage at 6 % APR. If you borrow the money from this mortgage company, your monthly mortgage payment will be closest to: 14) A) $3094 B) $1934 C) $1547 D) $2708 5 A bank offers a loan that will requires you to pay 8% interest compounded semiannually. Which of the following is closest to the EAR charged by the bank? A) 16.32% 15) B) 9.79% C) 6.53% D) 8.16% 16, A 10% APR with quarterly compounding is equivalent to an EAR of 16) A) 9.81% B) 10.47% C) 10.00% D) 10.38% 17 A house costs $143,000. It is to be paid off in exactly ten years, with monthly payments of $1708.65. 17) What is the APR of this loan? A) 8.65% B) 7.65% C) 6.65% D) 5.65% 18) A pottery factory purchases a continuous belt conveyor kiln for $45,000. A 8.6 % APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $560.35, over what term is this loan being paid? A) 9 years 18) D) 8 years C) 10 years B) 11 years 19) A Xerox DocuColor photocopier costing $45,000 is paid off in 60 monthly installments at 7.40% APR. After three years the company wishes to sell the photocopier. What is the minimum price for which they can sell the copier so that they can cover the cost of the balance remaining on the loan? A) $16,009 19) D) $24,013 C) $20,011 B) $28,015 20) APR. After 18 months the investor resells the property for $766,947. How much cash will the investor have from the sale, once the mortgage is paid off? A) $164,346 20) An investor buys a property for $699,000 with a 25-year mortgage and monthly payments at 7.90% D) $82,173 C) $65,738 B) $115,042

Answer 1

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Ans 14	we have to use financial calculator to solve this
	put in calculator -
	I	6%/12	0.50%
	PV		-270000
	FV		0
	N	20*12	240
	Compute PMT		1,934
	Ans = option B)		1,934
Ans 15	EAR = (1+8%/2)^2-1
		8.16%
	Ans = option D)		8.16%
Ans 16	EAR =	(1+10%/4)^4-1
		10.38%
	Ans = option D)		10.38%
Ans 17
	We have to use financial calculator to solve this
	Put in calculator -
	FV		0
	PV		-143000
	PMT		1708.65
	N	10*12	120
	Compute I		0.64%
	APR = 6.4%*12		7.65%
	Ans = option B)		7.65%