Jack and Hope are thinking of purchasing a house. The house costs $320,000 and they have saved $80,000 as a down payment. The rest will be secured by a mortgage. The bank is offering a 25 year mortgage with a term of 5 years at a rate of 7% (APR) requiring monthly payments.
a) Calculate the amount of the payments.
b) Calculate the monthly payments if they are made at the beginning of the month rather than the end.
c) If Jack and Hope can only afford to pay $1,500 each month, how much would the bank allow them to borrow? (payments made at the end of each month)
d) Based on the reduced mortgage amount calculated in (c), Jack and Hope decide to delay the purchase of the house for 2 years, so they can save the additional money needed to fund the shortfall. How much would they need to save each month in order to save the necessary funds? Assume they can invest the funds in an account earning 6% with interest compounded monthly. The $80,000 down payment will also be deposited into this account.
e) Assuming they secure the mortgage in part (c), how much of the 81’st mortgage payment is principal and how much is interest?
Are long-run economic profits a possibility for Smart Balance? In long-run equilibrium, will Smart Balance have excess capacity or a markup? While it’s not the biggest br...May 02 2020
1. How do the balance sheets of savings institutions differ from those of commercial banks? How do their sizes compare?May 18 2020
NPV, inflation and taxes. Fancy Foods is considering replacing all 12 of its meat scales with new, digital ones. The old scales are fully depreciated and have no disposal...Jul 15 2020
From the delegator’s aspect, all of the following are the factors affecting the delegation of authority except (a) Love for authority (b...Dec 04 2017
Which of the following in not an objective of financial reporting? (A) to provide information that is useful in investment and credit decisions (B) to provide informati...May 16 2018
Consider the sterile male control model as described in the example entitled "Sterile Male Insect Control" and let um be the probability that the population becomes extin...Aug 04 2020
What are your recommendations for service organizations? In what way, can your discussions/findings enhance managers understanding regarding the topic? What are some co...Mar 21 2020
Figure P3.24 P 3.25. Find the equivalent capacitance between terminals x and y for each of the circuits shown in Figure P3.25 10 AF 15 paF 10 ?F 5 AF >Jul 13 2020
Noah's ark has been described as having the following dimensions: 300 cubits long x 50 cubits wide x 30 cubits high. If a cubit is 18 inches, how many people could fit in...Feb 01 2020
What actions besides training must an organization such as Cisco take to make employees as productive as possible? >May 21 2020
Welcome to MyCourseHelp Services, World's leading Academic solutions provider with Millions of Happy Students.