You want to buy a house that costs 110000. you have 11000, Ask an Expert

Finance

You want to buy a house that costs $110,000. You have $11,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $99,000. However, the realtor persuades the seller to take a $99,000 mortgage (called a seller take-back mortgage) at a rate of 7%, provided the loan is paid off in full in 3 years. You expect to inherit $110,000 in 3 years; but right now all you have is $11,000, and you can afford to make payments of no more than $9,000 per year given your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.)

a. If the loan amortized over 3 years, how large would each annual payment be? Round your answer to the nearest cent.

c. If the loan were amortized over 30 years, what would each payment be? Round your answer to the nearest cent.

c. What would the loan balance be at the end of Year 3? Round your answer to the nearest cent.

d. What would the balloon payment be? Round your answer to the nearest cent.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M939335

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Question - the following are annual rates of return for us

Question - The following are annual rates of return for U.S. government T-bills and U.K. common stocks. Year U.S. Government T-Bills U.K. Common Stock 2003 .063 .150 2004 .081 .043 2005 .076 .374 2006 .090 .192 2007 .085 ...

Your division is considering two facility investment

Your division is considering two facility investment projects, each of which requires an upfront expenditure of $15 million. You estimated that the investments will produce the following net cash flows: Year Project A Pr ...

Market values and book values lo 1klingon widgets inc

M arket Values and Book Values [LO 1] Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $8 million. The machinery can be sold to the Romulans today for $6.7 million. Klingon's current balance sh ...

London purchased a piece of real estate last year for 81000

London purchased a piece of real estate last year for 81,000. the real estate is now worth 103,100. if London needs to have a total return of 0.24 during the year, then what is the dollar amount of income that she needed ...

Net income is 300 million depreciation is 70 million

Net income is 300 million, depreciation is 70 million, capital expenditures are 120 million, investment in working capital is 30 million, interest expenses (before tax) are 40 million, and outstanding debt is 850 million ...

Asset management ratios corn products corp ended the year

Asset Management Ratios Corn Products, Corp. ended the year 2008 with an average collection period of 32 days. The firm's credit sales for 2008 were $10.7 million. What is the year-end 2008 balance in accounts receivable ...

With auto loans it is common for buyers to trade in their

With auto loans, it is common for buyers to trade in their cars after the outstanding principal on the car loan exceeds the re-sale value of the used car. After which loan payment will it be profitable for you to trade-i ...

Assume that a firm could borrow 100 billion dollars the

Assume that a firm could borrow 100 billion dollars. The most straightforward value from the leveraged recapitalization that people would estimate is the present value of interest tax shield. Assume the cost of debt is 0 ...

If you take out a 15-year loan in the amount of 370000 at 7

If you take out a 15-year loan in the amount of $370,000 at 7 percent rate annually. The loan is to be paid off by equal monthly installments over 15 years. Draw an amortization table showing the beginning balance, total ...

What would be examples of valid selection methods used by

What would be examples of valid selection methods used by the human resource department to ensure selecting the appropriate candidate for a job.

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert