mortgage broker is offering a $284,000 20-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 5.0 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 8.0 percent APR
What are the monthly payments in the first two years?
What are the monthly payments after the second year?
To borrow $800, you are offered an add on interest loan at 9.2 percent with 12 monthly payments. Compute the 12 equal payments.
Compute the EAR of the loan
Rachel purchased a $19,500 car three years ago using a 8 percent, 4-year loan. She has decided that she would sell the car now, if she could get a price that would pay off the balance of her loan.
What is the minimum price Rachel would need to receive for her car?
| mortgage broker is offering a $284,000 20-year mortgage with a teaser rate. In the first two years of the mortgage, the borrower makes monthly payments on only a 5.0 percent APR interest rate. After the second year, the mortgage interest rate charged increases to 8.0 percent APR
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Related questions
| Rachel purchased a $23,000 car three years ago using a 9 percent, 5-year loan. She has decided that she would sell the car now, if she could get a price that would pay off the balance of her loan. |
| What is the minimum price Rachel would need to receive for her car? Given a 7 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of $1,350, $1,550, $1,550, and $1,850. |
| Assume that you contribute $320 per month to a retirement plan for 20 years. Then you are able to increase the contribution to $640 per month for another 30 years. Given a 7 percent interest rate, what is the value of your retirement plan after the 50 years?
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| A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $1,400 per month for the next three years and then $2,800 per month for two years after that. If the bank is charging customers 8.50 percent APR, how much would it be willing to lend the business owner? You are looking to buy a car. You can afford $470 in monthly payments for four years. In addition to the loan, you can make a $1,200 down payment. If interest rates are 7.50 percent APR, what price of car can you afford? |
| What annual interest rate would you need to earn if you wanted a $1,000 per month contribution to grow to $83,500 in six years?
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