An investor buys a property for $683,000 with a 25-year mortgage and monthly payments at 7.3% APR. After 18 months the investor resells the property for $747,888. How much cash will the investor have made from the sale, once the mortgage is paid off? ... O A. $160,262 O B. $80,131 O C. $112,183 O D. $64,105

An investor buys a property for $683,000 with a 25-year mortgage and monthly payments at 7.3% APR. After 18 months the investor resells the property for $747,888. How much cash will the investor have made from the sale, once the mortgage is paid off? ... O A. $160,262 O B. $80,131 O C. $112,183 O D. $64,105

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

An investor purchased an apartment building that generates $200,000 in annual net operating income. The apartment was purchased for $2,500,000. The investor expects to receive $75,000 annually, and a 10.0% return on equity. What is the mortgage capitalization rato? OA.6.75% OB.7.14% OC.7.31% D.8.14%
ll. Subject :- Accounting You are buying an investment property for $375075 today. Through research, you have determined that the value of the property is likely to grow at a rate of 7.92% per year, on average. How long until the value of the property grows to $521968?
An investor has $60,000 to invest in a $280,000 property. He can obtain either a $220,000 loan at 9.5 percent for 20 years or a $180,000 loan at 9 percent for 20 years and a second mortgage for $40,000 at 13 percent for 20 years. All loans require monthly payments and are fully amortizing.a. Which alternative should the borrower choose, assuming he will own the property for the full loan term?b. Would your answer change if the borrower plans to own the property for only five years?c. Would your answers to (a) and (b) change if the second mortgage had a 10-year term?
2. An investor has $60,000 to invest in a $280,000 property. He can obtain either a $220,000 loan at 9.5 percent for 20 years or a $180,000 loan at 9 percent for 20 years and a second mortgage for $40,000 at 13 percent for 20 years. All loans require monthly payments and are fully amortizing. a. Which alternative should the borrower choose, assuming he will own the property for the full loan term? b. Would your answer change if the borrower plans to own the property only five years? Question 3
You are buying your first condo for $250, 000 and you will make a $50, 000 down payment. You have arranged to finance the remainder with a 30 year, monthly payment, amortized mortgage at a 2.25% nominala. $838.52 b. $850.48 c. $764.49 d. $517.3 e. $1040.1
Use a bankers year: 360 days To complete the sale of a house, the you accept a 240-day note for $9,000 at 7% simple interest. (Both interest and principal are repaid at the end of the 240 days.) Wishing to use the money sooner for the purchase of another house, the you sell the note to a third party for $9,108 after 80 days. What annual simple interest rate will the third party receive for the investment? Express your answer as a percentage.
An investor is looking for a loan for an investment property that he has found. He can afford a monthly payment of $1,475. The interest rated quoted to him was 7.25%. He built the following table from that information. A $74,049 $125,638 $161,580 t 5 10 15 a) A(5) = b) If the investment property cost $161,580, how many years must the investor make monthly payments? t 20 25 30 A $186,620 $204,066 $216,220
A borrower is purchasing a property for $325,000. She is considering the following three loans: Loan 1: 75% LTV, 30 year FRM, fully amortizing, 4% interest Loan 2: 80% LTV, 30 year with 5 year IO period fully amortizing, 3.25% interest in IO period, 5 percent interest after IO period ends. Loan 3: 90% LTV, 15 year FRM, fully amortizing, 3.5% interest If the borrower held each loan until maturity, how much in interest would she pay on each loan?
What is the value accumulated at the end of 30 years if $300 deposited at the end of each month in a mutual fund account that earns 12 percent annually during the period. Ans. A mortgage calls for monthly payments of $970.30, including interest at 7.6 percent. The current value of the mortgage is $95,258.72. Approximately how long will it take to fully amortize the mortgage? Ans. An income-producing property is priced at $550,000 and is expected to generate the following after-tax cash flows: Year 1: $50,000; Year 2: $55,000; Year 3: $60,000 and $600,000. Calculate the annual IRR for this investment opportunity. Ans.
If your father wants to invest in a house and give you the following facts. Purchase price SR 1000,000 Annual maintenance: SR 5000 Annual income: SR 50000 Expected sale price after 15 years: SR 900,000 The IRR of the investment is nearest to A. 4% B. 1% C. 8% D. 7%
Use the following amortization chart: Selling price of home $77,000, Down payment $5,000, Principal $72,000, Rate of interest 5.0%, 30 years, Payment per $1,000 $5.37, Monthly mortgage payment $386.64. What is the total cost of interest?
You have received a settlement offer from an automobile manufacturer due to mechanicalproblems with your automobile. The manufacturer will pay you $20,000 in one lump sumfive years from now. You can earn 4% on your investments. The present value of the manufacturer’s settlement offer is closest toa. $20,000.b. $19,200.c. $24,330.d. $16,440.

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