0 Stimmen dafür0 Stimmen dagegen

546 Aufrufe16 Seitenmanual, real estate, brueggeman

Feb 21, 2016

© © All Rights Reserved

DOC, PDF, TXT oder online auf Scribd lesen

manual, real estate, brueggeman

© All Rights Reserved

Als DOC, PDF, TXT **herunterladen** oder online auf Scribd lesen

546 Aufrufe

manual, real estate, brueggeman

© All Rights Reserved

Als DOC, PDF, TXT **herunterladen** oder online auf Scribd lesen

- Habitat for Humanity Frequently Asked Questions
- Housing Finance in Bangladesh
- Real Estate Chapter 9
- 277620531study Material Company Schemes k.j.padmakumar (3)
- RE/MAX Real Estate Solutions Summer 2015 Buying a Home Guide
- FN-444 Chapter 10
- finalassignment2fin101 final
- Good Credit
- NBFC Financial Company
- SECTRANS+DIGEST
- citi_cards_non_perm_res_al_cre_card_app
- 2005 HSBC Agreement With JAMS
- Project Report on Convergence of Banking Sector to Housing Finance
- Mortgage Interest Rates Trends and the Housing Market
- Untitled
- Spouses Salvador Abella and Alma Abella Petitioners vs Spouses Romeo Abella and Annie Abella Respondents
- Abella vs Abella
- NPA
- The PMT
- MP100

Sie sind auf Seite 1von 16

Question 4-1

What are the major differences between the CAM, and CPM loans? What are the advantages to borrowers and risks to

lenders for each? What elements do each of the loans have in common?

CAM - Constant Amortization Mortgage - Payments on constant amortization mortgages are determined first by computing

a constant amount of each monthly payment to be applied to principal. Interest is then computed on the monthly loan

balance and added to the monthly amount of amortization to determine the total monthly payment.

CPM - Constant Payment Mortgage - This payment pattern simply means that a level, or constant, monthly payment is

calculated on an original loan amount at a fixed rate of interest for a given term.

CAM - lenders recognized that in a growing economy, borrowers could partially repay the loan over time, as opposed to

reducing the loan balance in fixed monthly amounts.

CPM - At the end of the term of the mortgage loan, the original loan amount or principal is completely repaid and the

lender has earned a fixed rate of interest on the monthly loan balance. However the amount of amortization varies each

month.

When both loans are originated at the same rate of interest, the yield to the lender will be the same regardless of when the

loans are repaid (ie, early or at maturity).

Question 4-2

Define amortization.

Amortization is the process of loan repayment over time.

Question 4-3

Why do the monthly payments in the beginning months of a CPM loan contain a higher proportion of interest than

principal repayment?

The reason for such a high interest component in each monthly payment is that the lender earns an annual percentage

return on the outstanding monthly loan balance. Because the loan is being repaid over a long period of time, the loan

balance is reduced only very slightly at first and monthly interest charges are correspondingly high.

Question 4-4

What are loan closing costs? How can they be categorized? Which of the categories influence borrowing costs and why?

Closing costs are incurred in many types of real estate financing, including residential property, income property,

construction, and land development loans.

Categories include: statutory costs, third party charges, and additional finance charges.

Closing costs that do affect the cost of borrowing are additional finance charges levied by the lender. These charges

constitute additional income to the lender and as a result must be included as a part of the cost of borrowing. Lenders refer

to these additional charges as loan fees.

Question 4-5

Does repaying a loan early ever affect the actual or true interest cost to the borrower?

When loan fees are charged and the loan is paid off before maturity, the effective interest cost of the loan increases even

further than when the loan is repaid at maturity.

Question 4-6

Why do lenders charge origination fees, especially loan discount fees?

Lenders usually charge these costs to borrowers when the loan is made, or closed, rather than charging higher interest

rates. They do this because if the loan is repaid soon after closing, the additional interest earned by the lender as of the

repayment date may not be enough to offset the fixed costs of loan origination.

Question 4-7

What is the connection between the Truth-in-Lending Act and the annual percentage rate (APR)?

Truth-in-Lending Act - the lender must disclose to the borrower the annual percentage rate being charged on the loan.

The APR reflects origination fees and discount points and treats them as additional income or yield to the lender

regardless of what costs the fees are intended to cover.

4-1

Question 4-8

Does the annual percentage rate always equal the effective borrowing cost?

The annual percentage rate under truth-in-lending requirements never takes into account early repayment of loans. The

APR calculation takes into account origination fees, but always assumes the loan is paid off at maturity.

Question 4-9

What is meant by a real rate of interest?

A real rate of interest is an interest rate expressed in terms of real goods and is equal to the nominal rate less the expected

rate of inflation.

Question 4-10

What is a risk premium in the context of mortgage lending?

A reason for loan discount fees is that lenders believe that they can better price the loan to the risk they take. The risk for

some individual borrowers is slightly higher than others and these loans may require more time and expense to process and

control.

Question 4-11

When mortgage lenders establish interest rates through competition, an expected inflation premium is said to be part of the

interest rate. What does this mean?

The uncertainty of future economic factors, including the supply of savings, demand for housing and future levels of

inflation, directly affects interest rates. However, interest rates at a given point in time can only reflect the market

consensus of what these factors are expected to be. To be competitive, a lender can only charge an interest rate that reflects

what the market expects inflation to be even if he expects inflation to more.

Question 4-12

Why do monthly mortgage payments increase so sharply during periods of inflation? What does the tilt effect have to do

with

this?

In order to receive the full interest necessary to leave enough for a real return and risk premium over the life of the loan,

more

real dollars must be collected in the early years of the loan (payments collected toward the end of the life of the mortgage

will be worth much less in purchasing power)

Tilting the real payment stream in the early years have to make up for the loss in purchasing power in later years.

Question 4-13

As inflation increases, the impact of the tilt effect is said to become even more burdensome on borrowers. Why is this so?

With the general rate of inflation and growth in the economy, borrower incomes will grow gradually or on a year-by-year

basis. However, as expected inflation increases, lenders must build estimates of the full increase into current interest rates

up front or when the loan is made. This causes a dramatic increase in required real monthly payments relative to the

borrowers current real income.

Question 4-14

A mortgage loan is made to Mr. Jones for $30,000 at 10 percent interest for 20 years. If Mr. Jones has a choice between a

CPM and a CAM, which one would result in his paying a greater amount of total interest over the life of the mortgage?

Would one of these mortgages be likely to have a higher interest rate than the other? Explain your answer. A CPM loan

reduces the principal balance more slowly, as a result, if Mr. Jones chooses a CPM, he will pay a greater amount of interest

over the life of the loan. A CPM may have a lower interest rate. The initial monthly payments for a CPM are considerably

less than those of a CAM, and borrowers are more apt to repay the loan. If an economy were experiencing real economic

growth with relatively stable prices, increases in income and property values would reduce borrower default risk associated

with a CPM loan. Additionally, lenders receive a greater portion of their return (interest earned) early with a CPM. By

decreasing default risk and the effects of default, a CPM may have lower rate of interest than a CAM.

Question 4-15

What is negative amortization? Why does it occur with a GPM? What happens to the mortgage balance of a GPM over

time?

No amortization of principal occurs until payments increase in later periods. The loan balance increases during the first few

years after origination, because the initial GPM payments are lower than the monthly interest requirements at a given rate.

Once the loan payments are more than the monthly interest payments, the balance begins to decline until it reaches zero at

maturity.

4-2

Fixed Rate Mortgage Loans

Problem 4-1

A borrower makes a fully amortizing CPM mortgage loan.

Principal

=

Interest

=

Term

=

$125,000

11.00%

20 years

CPM Payment:

The monthly payment for a CPM is found using the following formula:

Monthly payment

MLC, 11%, 20 yrs

Payment

=

=

=

=

.0103219 (from appendix B)

$125,000 x .0103219

$1,290.24

PMT = $1,290.24 (slight difference due to rounding.)

CAM Payments:

Principal

=

Term

=

Monthly amortization

Monthly amortization

Monthly amortization

=

=

=

$125,000

20 years

Principal divided by term of loan in months

$125,000 / (240 months)

$520.83 (Rounded)

Set up the following table similar to Exhibit 4-4 to solve for the initial 6 monthly payments.

(1)

Month

1

2

3

4

5

6

(2)

Opening Balance

$125,000.00

$124,497.17

$123,958.33

$123,437.50

$122,916.67

$122,395.83

Problem 4-2

(a) Monthly payment = $671.36

Solution:

N

=

I

=

PV

=

FV

=

(3)

Interest (11%/12)

$1,145.83

$1,141.06

$1,136.28

$1,131.51

$1,126.74

$1,121.96

(4)

Amortization

$520.83

$520.83

$520.83

$520.83

$520.83

$520.83

25x12 or 300

9%/12 or .75

$80,000

0

PMT

=

-$671.36

(b) Month 1:

interest payment:

$80,000 x (9%/12) = $600

principal payment:

$671.36 - $600

= $71.36

4-3

(3) + (4)

Monthly Payment

$1,666.67

$1,661.89

$1,657.12

$1,652.34

$1,647.57

$1,642.80

(2) -(4)

Ending Balance

$124,479.17

$123,958.33

$123,437.50

$122,916.67

$122,395.83

$121,875.00

total payment:

$671.36 x 300

= $201,408

total principal payment: $80,000

total interest payments:

$201,408 - $80,000 = $121,408

(d) Outstanding loan balance if repaid at end of ten years = $66,191.67

Solution:

N

=

25x12 or 300

I

=

9%/12 or 0.75

PMT

=

$671.36

FV

=

0

Solve for loan balance:

PV

=

$66,191.67

(e) Trough ten years:

total payments:

$671.36 x 120

= $80,563.20

total principal payment (principal reduction):

$80,000-66,191.67*= $13,808.33

*PV of loan at the end of year 10

total interest payment:

$80,563.20-13,808.33= $66,191.67

(f) Step 1, Solve for loan balance at the end of month 49:

N

=

300/49 or 251

I

=

9%/12 or 0.75

PMT

=

$671.36

FV

=

0

Solve for loan balance:

PV

=

-$75,793.68

Step 2, Solve for the interest payment at month 50:

interest payment:

$75,793.68x(.09/12)= $568.45

principal payment:

$671.36 - $586.45 = $102.91

4-4

Problem 4-3

(a) Monthly payment = $733.76

Solution:

N

=

I

=

PV

=

FV

=

Solve for payment:

PMT

=

30x12 or 360

8%/12 or 0.67

-$100,000

0

$733.76

Solution:

N

=

30x4 or 120

I

=

8%/4 or 2

PV

=

-$100,000

FV

=

0

Solve for payment:

PMT

=

$2,2024.81

(c) Annual Payment = $8,882.74

Solution:

N

=

I

=

PV

=

FV

=

Solve for payment:

PMT

=

(d) Weekly Payment = $169.23

Solution:

N

=

I

=

PV

=

FV

=

Solve for payment:

PMT

=

30

8%

-$100,000

0

$8,882.74

52x30 or 1,560

8%/52 or 0.019

-$100,000

0

$169.23

Problem 4-4

Monthly:

total principal payment:

total interest payment:

($733.76 x 360) - $100,000 =

Quarterly:

total principal payment:

total interest payment:

($2,204.81 x 120)-$100,000=

Annually:

total principal payment:

total interest payment:

($8,882.74 x 30) - $100,000=

Weekly:

total principal payment:

total interest payment:

($169.23 x 1560)-$100,000 =

$100,000

$164,153.60

$100,000

$164,577.20

$100,000

$166,482.20

$100,000

$163,998.80

The greatest amount of interest payable is with the Annual Payment Plan because you are making payments less frequently.

Therefore, reducing you balance less frequently and paying interest on a greater amount each year.

4-5

Problem 4-5

(a) Monthly Payment:

Solution:

N

=

I

=

PV

=

FV

=

Solve for payment:

PMT

=

20x12 or 240

8%/12 or 0.67

-$100,000

0

$836.44

total payment:

$836.44 x240 =

$200,745.60

total principal payment: $100,000

total interest payment:

$200,745.60 - 100,000 =$100,745.60

(c) Outstanding loan balance if repaid at end of year eight = $77,272.67

Solution:

N

=

12x12 or 144

I

=

8%/12 or 0.67

PMT

=

-$836.44

FV

=

0

Solve for mortgage balance:

PV

=

$77,272.67

Total interest collected:

total payment + mortgage balance - principal

$836.44 x (8x12) +

77,272.67

- 100,000

total interest collected = $57,570.91

(d) Step 1, Solve for the loan balance at the end of year 5:

N

=

15x12 or 180

I

=

8%/12

or 0.67

PMT

=

-$836.44

FV

=

0

Solve for loan balance:

PV

=

$87,525.58

After reducing the loan by $5,000, the balance is:

$87,525.58 - 5,000 = $82,525.58

4- The new loan maturity will be 161 months after the loan is reduced at the end of year 5.

Solution:

I

=

8%/12 or 0.67

PMT

=

-$836.44

PV

=

$82,525.58

FV

=

0

Solve for maturity:

N

=

161.37

4-6

Solution:

I

=

8%/12 or 0.67

N

=

15x12 or180

PV

=

$82,525.58

FV

=

0

Solve for payment:

PMT

=

-$788.86

Problem 4-6

(a) Monthly payment reduction due to principal reduction.

Initial principal

=

Interest rate

=

Initial term

=

Initial monthly payment

Initial monthly payment

=

=

$75,000

10.00%

30 years

Principal x (MLC, 10%, 30 years)

$658.18

Mortgage loan balance after 10 years = PV of 340 payments of $658.18 discounted @10%

Mortgage loan balance after 10 years = $68,203.51

Reducing the mortgage balance by $10,000 leaves a principal balance of $58,203.51. The new payment would be based on 10%

interest and a 20 year term.

New monthly payment = New principal x (MLC, 10%, 30 years)

New monthly payment = $561.68

(b) Maturity shortening due to principal reduction.

Initial monthly payment = Principal x (MLC, 10%, 30 years)

Initial monthly payment = $658.18

The new maturity is the time necessary for the original monthly payments of $658.18 to fully amortize the remaining principal

balance of $58,203.51.

From a financial calculator, using PV of $58,203.51, an interest rate of 10%, and payments of $658.18, we get a new maturity of 161

months or 13 years and 5 months.

This can be checked by noting that $58,203.51 divided by 4658.18 equals 88.43118. This number corresponds to the MPVIFA at

10% interest with a maturity of 161 months.

4-7

Alternative Solution

Step 1, Solve for the original monthly payment:

I

=

10%/12 or 0.83

N

=

30x12 or 360

PV

=

-$75,000

FV

=

0

Solve for payment:

PMT

=

$658.18

Step 2, Solve for current balance:

I

=

10%/12 or 0.83

N

=

20x12 or 240

PV

=

-$75,000

PMT

=

$658.18

Solve for mortgage balance:

FV

=

$68,203.24

(a) New Monthly Payment = $561.67

Solution:

I

=

10%/12 or 0.83

N

=

12x20 or 240

PV

=

$58,203.24*

FV

=

0

Solve for payment:

PMT

=

-$561.67

(b) New Loan Maturity = 161 months

Solution:

I

=

10%/12 or 0.83

PMT

=

-$658.18

PV

=

$58,203.24*

FV

=

0

Solve for maturity:

N

=

161

*$68,203.24 - 10,000

Problem 4-7

The loan will be repaid in 158 months.

Solution:

I

=

7.5%/12 or 0.625

PMT

=

$1,000

PV

=

$100,000

FV

=

0

Solve for maturity:

N

=

157.4226

Problem 4-8

The interest rate on the loan is 12.96%.

Solution:

N

=

25x12 or 300

PMT

=

-$900

PV

=

$80,000

FV

=

0

Solve for the annual interest rate:

I

=

1.08 (x12) or 12.96%

4-8

Problem 4-9

(a) Monthly Payments = $656.70

Solution:

N

=

10x12 or 120

I

=

9%/12 or 0.75

PV

=

-$60,000

FV

=

$20,000

Solve for monthly payment:

PMT

=

$656.70

(b) Loan balance at the end of year five = $44,409.83

Solution:

N

=

5x12 or 60

I

=

9%/12 or 0.75

PMT

=

$656.70

FV

=

$20,000

Solve for the loan balance:

PV

=

-$44,409.83

Problem 4-10

(a) Monthly Payments = $800

Solution:

N

=

10x12 or 120

I

=

12%/12 or 1

PV

=

-$80,000

FV

=

$80,000

Solve for monthly payments:

PMT

=

$800

(b) Loan balance = $80,000

Solution:

N

=

12x5 or 60

I

=

12%/12 or 1

PV

=

-$80,000

PMT

=

$800

Solve for loan balance:

FV

=

$80,000

You also know the loan balance will be the same as initial loan amount because this is an interest only loan where there is no loan

amortization or reduction of principal.

(c) Yield to the lender =12%

Solution:

N

=

PMT

=

PV

=

FV

=

Solve or the annual yield:

I

=

(d) Yield to the lender =12%

Solution:

N

=

PMT

=

PV

=

FV

=

Solve or the annual yield:

I

=

12x5 or 60

$800

-$80,000

$80,000

1 (x12) or 12

12x10 or 120

$800

-$80,000

$80,000

1 (x12) or 12%

4-9

Problem 4-11

Monthly Payments = $982.63

Solution:

N

=

10x12 or 120

I

=

8%/12 or 0.67

PV

=

$90,000

FV

=

-$20,000

Solve for monthly payments:

PMT

=

$982.63

Yield to the lender =8.41%

Solution:

N

=

PMT

=

PV

=

FV

=

Solve or the annual yield:

I

=

12x10 or 120

$982.63

-$88,200*

$20,000

.7011 x 12 or 8.413%

Step 1, Solve the loan balance if repaid in four years:

Solution:

N

=

6x12 or 72

I

=

8%/12 or 0.67

FV

=

$20,000

PMT

=

$982.63

Solve for the loan balance:

PV

=

-$68,439.23

Step 2, Solve for the yield:

Solution:

N

=

12x4 or 48

PMT

=

$982.63

PV

=

-$88,200*

FV

=

$68,439.23

Solve or the annual yield:

I

=

.722 (x12) or 8.66%

*-$90,000 x (100-2)% = -$88,200

4-10

Problem 4-12

(a) At the end of year ten $94,622.86 will be due:

Solution:

N

=

12x10 or 120

I

=

8%/12 or 0.67

PV

=

-$50,000

PMT

=

0

Solve for loan balance:

FV

=

$94,622.86

(b) Step 1, Solve for loan balance at end of year eight

Solution:

N

=

8x12 or 96

I

=

8%/12 or 0.67

PV

=

-$50,000

PMT

=

0

Solve for loan balance:

FV

=

$94,622.86

Step 2, Solve for the yield:

Solution:

N

=

PMT

=

PV

=

FV

=

Solve or the annual yield:

I

=

8x12 or 96

0

-$50,000

$94,622.86

.67 (x12) or 8%

Note: because there were no points, the yield must be the same as the initial interest rate of 8% so no calculations were

really necessary.

(c) Yield to lender with one point charged = 8.13%

Solution:

N

=

8x12 or 96

PMT

=

0

PV

=

-$49,500*

FV

=

$94,622.86

Solve or the annual yield:

I

=

.68 (x12) or 8.13%

*-$50,000 x (100-1)% = -$49,500

4-11

Problem 4-13

(a)

Property value

=

Principal

=

Interest rate

=

Maturity

=

Loan origination fee =

$105,000

$84,000

12.00%

30 years

$3,500

Lender will disburse $84,000.00 less the loan origination fee of $3,500.00 or $80,500.00

(b) Monthly payments would be:

$84,000 x (MLC, 12%, 30 years)

$864.03

$80,500

$864.03 x (MPVIFA, ?%, 30 years)

Solving for the interest rate, we get 12.58%

(c) The annual percentage rate (APR) is the same as the interest rate in part (b) rounded to the nearest .125%. Therefore, the APR is

12.625%.

Note to Instructors: APRs are rounded to the nearest 1/8 of a percent.

(d) Assuming the loan payoff occurs after 5 years, determine the mortgage balance:

Mortgage balance = PV of 300 monthly payments of $864.03 discounted at 12.00%

Mortgage balance = $82,037.10

The effective interest cost would be:

$864.03 x (MPVIFA, ?%, 5 years) + $82,037.10 x (MPVIF, ?%, 5 years) = $80,500

Solving for the interest rate, we get 13.15%.

The effective interest rate in this part is different from the APR because the loan origination fee is amortized over a much shorter

period (5 years instead of 30 years).

(e) With a prepayment penalty of 2% on the outstanding loan balance of $82,037.10, the penalty would be $1,640.72.

The effective interest cost would be:

$864.03 x (MPVIFA, ?%, 5 years) + $83,677.85 x (MPVIF, ?%, 5 years) = $80,500

Solving for the interest rate, we get 13.44%.

This rate is different from the APR because penalty points are not used in the calculation of the APR.

4-12

Problem 4-14

Points required to achieve a yield to 10% for the 25 year loan.

Monthly payments:

$95,000 x (MLC, 9%, 25 years)

$95,000 x (MLC, 9%, 25 years)

=

=

Monthly payment

$797.24

Subtracting $87,773.67 from $95,000.00, we get $7,226.33

The loan origination fee should be $7,226.33 if the loan is to be repaid after 25 years and the lender requires a 10% yield.

If the loan is expected to be repaid after 10 years, the loan balance at the end of 10 years must be determined:

Loan balance after 10 years = Present value of 180 payments of $797.24 discounted at 9%.

Loan balance after 10 years = 78,602.27

Discounting by the desired yield of 10%:

Present value = $797.24 (MPVIFA, 10%, 10 years) + $78,602.27 (MPVIF, 10%, 10 years)

Present value = 89,364.04

Subtracting $89,364.04 from $95,000.00, we get $5,635.96.

The loan origination fee should be $5,635.96 if the loan is to be repaid after 10 years, and the lender requires a yield of 10%.

Problem 4-15

(a) In order to find which loan is the better choice after 15 years, the effective interest rate of each loan must be calculated.

Principal

Nominal interest rate

Term (years)

Points

Payment

Loan Balance after 15 years

Loan Balance after 5 years

Loan A

$75,000

10.00%

30

6

$658.18

$61,248.42

$72,430.74

Loan B

$75,000

11.00%

30

2

$714.24

$62,840.44

$72,873.48

Loan A

$70,500.00 = $658.18 x (MPVIFA, ?%, 180 months) + $61,248.42 x (MPVIFA, ?%, 180 months)

Effective interest rate = 10.85%

Loan B

$73,500.00 = $714.24 x (MPVIFA,?%, 180 months) + $62,840.44 x (MPVIF, ?%, 180 months)

Effective interest rate = 11.29%

Loan A is the better alternative if the loan is repaid after 15 years.

(b) This part is solved the same as (a) except using the assumption that the loan is repaid after 5 years.

Loan A

$70,500.00 = $658.18 x (MPVIFA, ?%, 60 months) + $72,430.74 x (MPVIF, ?%, 60 months)

Effective interest rate = 11.61%

4-13

Loan B

$73,500.00 = $714.24 x (MPVIFA, ?%, 60 months) + $72,873.48 x (MPVIF, ?%, 60 months)

Effective interest rate = 11.53%

Loan B is the better alternative if the loan is repaid after 5 years.

Problem 4-16

(a) Monthly Payments = $1,382.50

Solution:

N

=

10x12 or 120

I

=

11%/12 or 0.92

PV

=

0

FV

=

-$300,000

Solve for monthly payments:

PMT

=

$1,382.50

(b) The borrower will have monthly payments of $1,382.50 during months 1 to 36

Solve for loan balance at the end of month 36

Solution:

N

=

36

I

=

11%/12 or 0.92

PV

=

0

PMT

=

$1,382.50

Solve for loan balance:

FV

=

-$58,649.97

(c) The borrower will have monthly payments of $626.22 during months 51 to 120

Step 1, Solve for loan balance at the end of month 50

Solution:

N

=

50

I

=

11%/12 or 0.92

PV

=

0

PMT

=

$2,000

Solve for loan balance:

FV

=

-$126,139.10

Step 2, Solve for payments during months 51 to 120

Solution:

N

=

120-50 or 70

I

=

11%/12 or 0.92

PV

=

$126,139.10

FV

=

-$300,000

Solve for monthly payments:

PMT

=

$626.22

Problem 4-17

Find the balance at the end of 5 years for a fully amortizing $200,000, 10% mortgage with a 25 year amortization schedule:

PV

i

n

= -200,000

= 10%

= 300

FV

Solve PMT

=0

= $1,817.40

4-14

i

n

= 10%

=240

PMT

FV

Solve PV

= $1,817.40

=0

= -188,327.38

Loan = 100,000, 12% interest, 20 years

A.

Monthly payments if

(1) Fully amortizing:

PV = -100,000

i = 12%

FV = 0

B.

C.

n

Solve PMTs

= 240

= $1,101.09

PV = -100,000

i = 12%

FV = $50,000

n

Solve PMTs

= 240

= $1,050.54

PV = 100,000

i = 12%

FV = 100,000

n

Solve PMTs

= 240

= $1,000.00

PV = -100,000

i = 12%

FV = 150,000

n

Solve PMTs

= 240

= $949.46

A.1

PMTs = 1,101.09

i

= 12%

FV

Solve PV

=0

= $91,744.33

A.2

PMTs = 1,050.54

i

= 12%

n

= 180

FV

Solve PV

= 50,000

= $95,872.16

A.3

PMTs = 1,000.00

i

= 12%

n

= 180

FV

Solve PV

= 100,000

= 100,000

A.4

PMTs = $949.46

i

= 12%

n

= 180

FV

Solve PV

= 150,000

= 104,127

A.1

A.2

A.3

A.4

$91,744.33 * .01

$95,872.16 * .01

$100,000.00 * .01

$104,127.84 * .01

= $ 917.44

= $ 958.72

= $1,000.00

= $1,041.28

4-15

D.

A.1

PV = -97,000, PMT = 1,101.09, FV = 0, n = 240 Solve i = 12.50

A.2

PV = -97,000, PMT = 1,050.54, FV = 50,000, n = 240 Solve i = 12.44

A.3

PV = -97,000, PMT = 1,000.00, FV = 100,000, n = 240 Solve i = 11.76

A.4

PV = -97,000, PMT = 949.46, FV = 150,000, n = 240 Solve i = 12.375

*Solution shown based on calculation final answers S/B rounded to nearest 1/8%

E.

Effective yield if loan prepaid EOY 5

A.1

PV = -97,000, PMT = 1,101.09, FV = 91,744.33 n = 60 Solve i = 12.84

A.2

PV = -97,000, PMT = 1,050.54, FV = 95,872.16 n = 60 Solve i = 12.83

A.3

PV = -97,000, PMT = 1,000.00, FV = 100,000.00 n = 60 Solve i = 12.82

A.4

PV = -97,000, PMT = 949.46, FV = 104,127.00 n = 60 Solve i = 12.80

F.

G.

Assume monthly payments in A.1 = 0 for 36 mos. What must payments be from yr. 4-17 to fully amortize the loan

at the end of 24 mos?

Part 1:

PV = -100,000

PMT = 0

i = 12%

Solve FV = 143,076.88

n = 36

Part 2:

PV = -143,076.88

n = 204

Solve PMT = $1,647.12

i = 12%

FV = 0

Principal = 100,000

Interest = 277,870

(2) n = 204

PMTs = 949.46

FV

= 150,000

i

= 12%

Solve PV = 102,177 balance

(4) 4 points charged, loan payoff 36 months, what is effective interest rate?

PV = -96,000

n = 36

FV = 102,177

PMT

= 949.46

Solve i = 13.62%

Problem 4-19

The effective cost is now 12.64% versus 12.82%.

Problem 4-20

The loan balance is now $61,680 versus $63,793.

4-16

- Habitat for Humanity Frequently Asked QuestionsHochgeladen vonLyn Sims
- Housing Finance in BangladeshHochgeladen vonShah Muhammed Bodrul Hasan
- Real Estate Chapter 9Hochgeladen vonfebrythiodor
- 277620531study Material Company Schemes k.j.padmakumar (3)Hochgeladen vonVimalKumar
- RE/MAX Real Estate Solutions Summer 2015 Buying a Home GuideHochgeladen vonREMAX Real Estate Solutions
- FN-444 Chapter 10Hochgeladen vonfreetaco411
- finalassignment2fin101 finalHochgeladen vonapi-303001447
- Good CreditHochgeladen vonme
- NBFC Financial CompanyHochgeladen vonBhupender Nagar
- SECTRANS+DIGESTHochgeladen vonElaine Dianne Laig Samonte
- citi_cards_non_perm_res_al_cre_card_appHochgeladen vonHarish Krishna
- 2005 HSBC Agreement With JAMSHochgeladen vonrdownin
- Project Report on Convergence of Banking Sector to Housing FinanceHochgeladen vonHari Prasad
- Mortgage Interest Rates Trends and the Housing MarketHochgeladen vonTerngu Ngaji
- UntitledHochgeladen vonVince Daw
- Spouses Salvador Abella and Alma Abella Petitioners vs Spouses Romeo Abella and Annie Abella RespondentsHochgeladen vonrandelrules
- Abella vs AbellaHochgeladen vonJunpyo Arkin
- NPAHochgeladen vonabhishekbehal5012
- The PMTHochgeladen vonSanket Gangal
- MP100Hochgeladen vonJaneGl Gl
- loan_marketHochgeladen vonRajesh Srivastava
- 1Hochgeladen vonyogeshgo
- PL HomeLoanProtectionPlanHochgeladen vontejasck
- 119. Odiamar vs Odiamar Valencia, GR 213582, June 28, 2017Hochgeladen vonMarc Gar-cia
- Housing FinanceHochgeladen vonSanjay Patel
- cc-121001Hochgeladen vonBill Smith
- The Consequences of Mortgage Credit Expansion- Evidence From the 2007 Mortgage Default Crisis , May 2008Hochgeladen vonapi-3818644
- description: tags: 0405Vol6Ch5DueCollDefHochgeladen vonanon-327260
- Supervisor or AnalystHochgeladen vonapi-121433819
- Franchise Application FormHochgeladen vonAriel Dicoreña

- laudon_mis12_ppt05Hochgeladen vonRaihan
- Financial Development and Economic Growth Views and AgendaHochgeladen vonRaihan
- Six SigmaHochgeladen vonRaihan
- portfolio constructionHochgeladen vonRaihan
- Portfolio ManagementHochgeladen vonRaihan
- Concept of Development-2Hochgeladen vonCatherine Co
- Lease PPTHochgeladen vonRaihan

- Data Interpretation 1Hochgeladen vonRohit Kumar
- Analyze the external environment of the ChinaHochgeladen vonZahid Al- Hossaini
- Asset Liabilities Manatgement Leo LabsHochgeladen vonNagireddy Kalluri
- AIAe-SLD-08112011-ON-GEHochgeladen vonoussama22
- Disciplining or Protecting the Poor..Avoiding the Social Costs of Peer PressureHochgeladen vonSantiago Beltran
- Car LeasingHochgeladen vonJanith Saumya Bandara
- banking and finance questionsHochgeladen vonatul mishra
- interest rate policy indiaHochgeladen vonHasheen Arora Bhutani
- 2012 Registration DocumentHochgeladen vonMohammed Yassin
- growth-vs-profitability-the-importance-of-roce.pdfHochgeladen vonhams
- FR SCHEME NOV 2019.docxHochgeladen vonAndy Asante
- Finance 3010 Test 1 Version a Spring 2006Hochgeladen vonHuyNguyễnQuangHuỳnh
- 2. Excchange Rate MovementHochgeladen vonTtha Yotha
- Vietnam Market Outlook 2018 the Re Rating Time 20180104Hochgeladen vonlequangtruong1602
- Chapter - Monetary Policy (Model & Transmission)1Hochgeladen vonNahidul Islam IU
- Quantitative_Problems_.docHochgeladen vonSadman Rahman Shourov
- Logical Foundations of a Self-Organizing EconomyHochgeladen vonalemis9
- FM Unit 1 NEWHochgeladen vonMickel Alexander
- introduction to credit risk management projectHochgeladen vonHeema Nimbeni
- 2012-annual-report.pdfHochgeladen vonFrasat Iqbal
- Chapter 13 Economy Market AnalysisHochgeladen vonAli Hussain
- SSRN-id1971158Hochgeladen vonJayashree Haridoss
- Finacial Planning Beaumont Resident 16Hochgeladen vonrentedmule00
- Actuarial Valuation of Pension Plans by Stochastic Interest Rates ApproachHochgeladen vontayko177
- final project(gayatri).pdfHochgeladen vonGayatriThotakura
- Econ Ch 14Hochgeladen vonBrad
- KASAPIHochgeladen vonKarl Jay Pimentel
- MGT411OnlineQuiz4..30Julyto2AugustHochgeladen vonsarfrax
- Bond Valuation 2018Hochgeladen vonKeegan
- P1 March 2013 AnswersHochgeladen vonSyed Asim Ali

## Viel mehr als nur Dokumente.

Entdecken, was Scribd alles zu bieten hat, inklusive Bücher und Hörbücher von großen Verlagen.

Jederzeit kündbar.