You plan to buy a $250,000 home with a 20% down payment. The bank you want to finance the loan through suggests two options: a 15-year mortgage at 4.25% APR and a 30-year mortgage at 5% APR. What is the difference in monthly payments between these two options?

Answers

Answer 1

Answer:

Answer:

A 15-year mortgage monthly payments is: $1,496.5

A 30-year mortgage monthly payments is: $1,060.1

=> The difference of monthly payment between the two options is: $436.4 ( $1,496.5 - $1,060.1) where the monthly payment of the option of 15-year mortgage is higher.

Explanation:

The borrowed amount in both options is : $250,000 * 80% = $200,000;

* A 15-year mortgage monthly payments is:

We have (1+APR) = ( 1 + Monthly Interest rate)^12 <=> 1.0425 = ( 1 + Monthly Interest rate)^12 <=> Monthly Interest rate = 0.3475%;

Amount of payment periods = 15 * 12 = 180

=> Monthly payment = (200,000 * 0.3475%) / [ 1 - 1.003475^(-180) ] = $1,496.5

* A 30-year mortgage monthly payments is:

We have (1+APR) = ( 1 + Monthly Interest rate)^12 <=> 1.05 = ( 1 + Monthly Interest rate)^12 <=> Monthly Interest rate = 0.4074%;

Amount of payment periods = 30 * 12 = 360

=> Monthly payment = (200,000 * 0.4074%) / [ 1 - 1.004074^(-360) ] = $1,060.1

Related Questions

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In 2010, Toyota recalled millions of automobiles to fix a potentially hazardous problem known as sudden acceleration. Writing in the Wall Street Journal, James Stewart gave investors the following advice: "Toyota shares were over $90 as recently as Jan. 19, 2010. They closed Tuesday (February 02, 2010) at $78.18, which strikes me as a modest decline under the circumstances. If I owned shares, I’d seize the chance to get out.Required:
Would a believer in the efficient markets theory be likely to follow Stewart's advice?

Answers

Answer:

Of course not. Someone that believes in the efficient market theory (or hypothesis as it is generally called), believes that the market is always right. As an individual investor, you might be right or wrong, but the market as a whole has access to perfect information and the price of each stock already has been determined factoring all possible events and outcomes. I.e. the market's price is always the correct price and there is no way in which an individual investor can make a profit by buying or selling undervalued or overvalued stocks.

Personally, I disagree with this hypothesis, and the reason why most people call is a hypothesis is that they disagree with it. If the market is always right, then this theory is no good.

If a war destroys a large portion of a country's capital stock but the saving rate is unchanged, the Solow model predicts output will grow and that the new steady state will approach: A. a higher output level than before. B. the same output level as before. C. a lower output level than before. D. the Golden Rule output level.

Answers

Answer:

B. The same output level as before.

Explanation:

If there is a war broke out in a country and because of the war a large potion of the country's capital stock is destroyed but the thing that is unchanged is saving rate.

So according to the solow model the output will grow and the steady state that is new will be the same level of output as before.

Valley Designs issued a 90-day, 6% note for $96,000, dated April 22, to Bork Furniture Company on account. Assume 360 days in a year when computing the interest. a. Determine the due date of the note. July 9 b. Determine the maturity value of the note. $ Feedback The due date is the date the note is to be paid. Remember the interest rate is stated on an annual basis, while the term is expressed as days. Assume a 360 day year. The maturity value is the amount that must be paid at the due date of the note. c1. Journalize the entry to record the receipt of the note by Bork Furniture. If an amount box does not require an entry, leave it blank. Accounts Receivable-Valley Designs Allowance for Doubtful Accounts Feedback The account receivable must be removed from the books and the newly issued note receivable recorded. c2. Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank.

Answers

Answer: Please see answer in explanation column

Explanation:

a) Due date = April 22+90 days = July 21

b) Maturity value = 96,000+(96,000*6%*90/360) = $97,440

c1) Journal entry for receipt of note by Bork Furniture

journal Debit Credit

Notes receivable $96,000

Account receivable $96,000

C2) Journal entry to record receipt of payment at maturity

journal Debit Credit

Cash $97,440

Notes receivable $96,000

Interest revenue $1,440 (97,440-96,000)

As a contemporary manager, your employees will be motivated to provide you with important feedback if:A. you provide closed-end surveys on a monthly basis.
B. you prepare daily, company-wide passive voicemail messages.
C you institute a respectful rank and file politeness plan, where middle and higherlevel managers are addressed as "Mr.", "Ms", or "Dr.".
D. you solicit open-ended responses from your employees.

Answers

Answer:D

D, is the is the answer.

Prepare the issuer’s journal entry for each of the following separate transactions.a. On March 1, Atlantic Co. issues 44,000 shares of $5 par value common stock for $302,000 cash.
b. On April 1, OP Co. issues no-par value common stock for $73,000 cash.
c. On April 6, MPG issues 2,300 shares of $15 par value common stock for $42,000 of inventory, $150,000 of machinery, and acceptance of a $92,000 note payable.

Answers

Answer:

The answer is given below;

Explanation:

a. Cash Dr.$302,000

Capital (44,000*5) Cr.$220,000

Paid in Capital in excess of par Cr.$82,000

b. Cash Dr.$73,000

Capital Cr.$73,000

c. Cash Dr.$42,000

Capital 2,300*15 Cr.$34,500

Paid in capital in excess of par Cr.$7,500

Machinery Dr.$150,000

Cash (150,000-92,000)Cr.$58,000

Note payable Cr.$92,000

What is the most appropriate decision on a product line when a company decides to lengthen its product line beyond its current range

Answers

Answer:

Line Stretching

Explanation:

A company normally makes an up-market stretch to obtain higher profit margins, achieve market growth, or position itself as a complete producer.