Problem 5-10 A floating rate mortgage loan is made for $195,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,560. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,560? Complete this question by entering your answers in the tabs below. Required B If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,560? Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Required A Loan balance in year 2 Interest accrued - Year 2 Interest accrued-Years 2-Year 5 < Required A Required B
Problem 5-10 A floating rate mortgage loan is made for $195,000 for a 30-year period at an initial rate of 12 percent interest. However, the borrower and lender have negotiated a monthly payment of $1,560. Required: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,560? Complete this question by entering your answers in the tabs below. Required B If the interest rate increases to 13 percent at the end of year 2, how much is the payment plus negative amortization in year 2 and year 5 if the payment remains at $1,560? Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Required A Loan balance in year 2 Interest accrued - Year 2 Interest accrued-Years 2-Year 5 < Required A Required B
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter7: Using Consumer Loans
Section: Chapter Questions
Problem 4FPE
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