1 suppose mary jane wishes to take our a 30-year, Ask an Expert

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1. Suppose Mary Jane wishes to take our a 30-year interest-only mortgage loan of $200,000 with an interest rate of 8%. How much will Mary Jane pay the lender EACH MONTH?

2. You are considering a 5%, 15-year mortgage with zero points. Noting that mortgage payments are made monthly, calculate your payment and effective annual rate. The loan is for $300,000. PLEASE WORK THIS PROBLEM CAREFULLY.

3. You are considering a 4.5%, 15-year mortgage with 2.5 points. Noting that mortgage payments are made monthly, calculate your payment and effective annual rate. The loan is for $300,000. PLEASE WORK THIS PROBLEM CAREFULLY.

4. Suppose you have a choice between (1) the 5%, 15-year mortgage and (2) the 4.5% mortgage with 2.5 discount points. Note that choosing the 2.5 discount point loan will save you $77.40 per month. If you go for the discount point loan, what is the minimum length of time you should keep the mortgage for the savings to outweigh the upfront cost? Note that upfront cost = 2.5% of $300,000 = $7,500. To answer this question, you need to determine when the present value of the savings equals the $7,500 upfront cost. PLEASE WORK THIS PROBLEM CAREFULLY.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91787522

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