Suppose you are shopping for a mortgage and the lender presents you with a long menu of loan options. For each option, there is a discount point charged and an interest rate given. The amount of the point ranges anywhere from -1% to 3%. When would it be optimal for you select a loan with a point of 2%? (Assume there is no affordability constraint, ie: you have the money to buy whatever point you would like). O If you have a very short holding period O Never O If you have a very long holding period O Only when the point is equal to the effective borrowing cost O Always

Suppose you are shopping for a mortgage and the lender presents you with a long menu of loan options. For each option, there is a discount point charged and an interest rate given. The amount of the point ranges anywhere from -1% to 3%. When would it be optimal for you select a loan with a point of 2%? (Assume there is no affordability constraint, ie: you have the money to buy whatever point you would like). O If you have a very short holding period O Never O If you have a very long holding period O Only when the point is equal to the effective borrowing cost O Always

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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Suppose you are shopping for a mortage and the lender presents you with long menu on loan options. For each option, there is a discount point charged at an interest rate given. The amount of the point ranges anywhere from -2% to 3%. When would it be optimal for you select a loan with a discount point of 3%? Group of answer choices 1) Only when the point is equal to the effective borrowing cost 2) Never 3) Only with ARM 4) If you have a very short holding period 5) If you have a very long holding period
6. Calculating simple interest and APR on a single-payment loan You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = P r t In the equation, FsFs is the finance charge for the loan. What are the other values? P is the amount of the loan. r is the stated rate of interest. t is the term of the loan in . You’re borrowing $4,000 for a year and a half with a stated annual interest rate of 10%. Complete the following table. (Note: Round your answers to the nearest dollar.)
You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = Amount of Loanx Interest Ratex Term of Loan where FsFs is the finance charge for the loan, and the term of the loan is in . You’re borrowing $10,000 for two years with a stated annual interest rate of 6%.
You are planning on taking out a mortgage and would ake to determine the cash value for a geven downs payment and set of penndic payments. The cinh vifus ega t Select one a down payment present value of penodic payments b down payment number of payments times payment size Oc present value of penodic payments Od down payment future value of periodic payments
You are considering taking out a 15-year loan versus a 30-year loan for a home. Explain what the pros and cons of both loan types are. Be sure to add appropriate detail to receive full credit. BIUS IE 블 Insert Formula X₂ X² 三星E
You are planning on taking out a mortgage and would ake to determine the cash value for a given downs payment and set of pendic payments. The cinh viuen egal Select one a down payment present value of penodic payments Hand written plz b down payment number of payments times payment size c. presont value of penodic payments Od down payment future value of periodic payments
Suppose that you have the capacity to pay, would you rather borrow a loan that is amortized monthly or one that is amotized quarterly? what are your considerations when availing a loan (qualitative or quantitative) discuss.
pls refer to the image attached, 1. suppose that you have the capacity to pay, would you rather borrow a loan that is amortized monthly, or one that is amortized quarterly? 2. what is your considerations when availing a loan? (quantitative or qualitative considerations) Discuss.
Watch the Mathematics of Finance video and then answer the question given below. Simple interest loans are generally used for which type of loan? Click here to watch the video. Choose the correct description of a simple interest loan. A. Home Mortgage loans B. Short term loans of less than a year C. Car loans D. Long term loans of a year or more
Suppose you need to borrow $200,000 to buy a home, and you are deciding between a 15 year mortgage and a 30 year mortgage. Research a bank offering 15 year and 30 year mortgage loans and find the interest rates on those loans. Use the techniques you learned in this Module to do the following: 1. Calculate the monthly payment for a 15-year mortgage and for a 30-year mortgage. 2. Find the total amount of interest you will pay on the 15 year mortgage and on the 30 year mortgage. 3. Describe some of the factors (financial and non-financial) that can influence whether to obtain a shorter term mortgage or a longer term mortgage. 4. Which mortgage would you take, the 15 year or the 30 year? Explain your decision.
Consider a loan repayment plan described by the following initial value problem, where the amount borrowed is B(0) = $40,000, the monthly payments are $600, and B(t) is the unpaid balance of the loan. Use the initial value problem to answer parts a through c. B' (+) =0.03B - 600, B(0) = 40,000 a) Find the solution of the initial value problem and explain why B is an increasing solution. B(t) = Why is B an increasing function? O A. The function is increasing because it is an exponential function with a positive coefficient and a negative exponent. O B. The function is increasing because it is an exponential function with a positive coefficient and a positive exponent. O C. The function is increasing because it is an exponential function with a positive exponent. O D. The function is increasing because it is an exponential function with a positive coefficient. b) What is the most that you can borrow under the terms of this loan without going further into debt each month? The…
In cell B12, create a formula using the PMT function to calculate the monthly payments for loan Option A. Use the values in cells B8, B10, and B5 for the Rate, Nper, and Pv arguments, respectively, and do not enter any values for the optional arguments. Copy the formula you created in cell B12 into the range C12:D12.

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