# 2024 – PROBLEMS 13 For the following loan make a table showing the

FINANCE 4 PROBLEMS – 2024

2024 – PROBLEMS 13 For the following loan make a table showing the.

PROBLEMS :

## > 

## > 

## Table showing

13. For the following loan, make a table showing the amount of each monthly payment that goes toward principal and interest for the first three months of the loan.

## > 

## > 

## Home mortgage

A home mortgage of $164,000 with a fixed APR of 3% for 30 years. (Round the final answers to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

## > 

## > 

Month 1:

Interest: ____

## >payment

Payment towards principal: ____

## ____

New Principal: ____

## > 

## > 

Month 2:

Interest: ____

## >payment

Payment towards principal: ____

## ____

New Principal: ____

## > 

## > 

Month 3:

Interest: ____

## >payment

Payment towards principal: ____

## ____

New Principal: ____

## > 

## > 

## > 

## > 

## 30-year fixed rate loan

25. You can afford monthly payments of $800. If current mortgage rates are 3.93% for a 30-year fixed rate loan, how much can you afford to borrow?

## > 

## > 

How much can you afford to borrow? $______ (round to nearest dollar)

## > 

## > 

## Loan payment formula

If you are required to make a 10% down payment and you have the cash on hand to do it, how expensive a home can you afford? (Hint: You will need to solve the loan payment formula for P.)

## > 

## > 

How expensive a home can you afford? $______ (round to nearest dollar)

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

## > 

24. You have a choice between a 30-year fixed rate loan at 6.5% and an adjustable rate mortgage (ARM) with a first year rate of 2%. Neglecting compounding and changes in principal, estimate your monthly savings with the ARM during the first year on a $225,000 loan.

## > 

## > 

## Approximate monthly savings

What is the approximate monthly savings with the ARM during the first year? $____ (round to nearest dollar)

## > 

## > 

Suppose that the ARM rate rises to 11.5% at the start of the third year. Approximately how much extra will you then be paying over what you would have paid if you had taken the fixed rate loan?

## > 

## > 

How much extra $_____ (round to nearest dollar)

## > 

## > 

## > 

## > 

20. Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $30,000 loan.

## > 

## > 

Option 1: a 30-year loan at an APR of 7.65%.

Option 2: a 15-year loan at an APR of 7.25%.

Find the monthly payment for each option.

## > 

## > 

The monthly payment for option 1 is $ _______

The monthly payment for option 2 is $ _______

## > 

## > 

Total loan costs for option 1 $ ______

Total loan costs for option 2 $ ______

## > 

## > 

(Do not round until the final answer. Then round to the nearest cent as needed.)

## > 

## > 

## > 

## > 

**Need assignment writing services that are 100% risk-free. Our writers are capable of providing the best assignment help to students in globally at best rates.**