You are considering purchasing a car with a sticker price of $50,000 (nonnegotiable with no down payment required). You wish to make monthly payments for five years and the most you can afford to pay is $1,200 a month. The credit union has agreed to loan you the money at a 7% annual interest rate. Create an amoritization table for the amount the bank wants you to pay and another table for the amount we can actually afford of $1,200.
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- You need to borrow $12,000 to buy a car, so you visit two banks and are given two alternatives. The first bank allows you to pay $2595.78 at the end of each year for six years. The first payment is to be made at the end of the first year. The second bank offers equal monthly loan payments of $198.87, starting at the end of first month. What are the interest rates that the banks are charging? Which alternative is more attractive?you want to buy a car and finance $20,000 to do so. You can afford a payment of up to $45p per month. The bank offers three choices for the loan: a four-year loan with an APR of 7%, a five- year loan with an APR of 7.5%, and a six-year loan with an APR of 8%. Which option best meets your needs, assuming you want to pay the least amount of interest?A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5% per year. The customer expects a monthly repayment schedule from you, to plan his repayment. Provide a loan amortization schedule for a monthly repayment of 1 year. (Amortization factor is 0.952 )
- You will usually have choices of interest rates and loan term when seeking a loan. For the following, calculate the monthly payment and total interest over the loan term with each option.You need a $20,000 to buy a used car. Your bank offers a 3 year loan at 5%, a 4 year loan at 6%, and a 5 year loan at 7%.3 year loan at 5%: Monthly payment: $ Total: $ Total interest: $ 4 year loan at 6%: Monthly payment: $ Total: $ Total interest: $ 5 year loan at 7%: Monthly payment: $ Total: $ Total interest: $You have a loan outstanding. It requires making three annual payments of $8,000 each at the end of the next three years. Your bank has offered to allow you to skip making the next two payments in lieu of making one large payment at the end of the loan's term in three years. If the interest rate on the loan is 5%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is $ (Round to the nearest dollar.)After a conversation with your banker, you’ve agreed to a 20% down payment on your $182,188 home. To keep this problem and your calculations relatively brief, assume that the bank has offered you a mortgage loan for $145,750 that carries a 6% interest rate, semiannual payments of $26,905, and a 3-year term. Remember, the process is the same when you are preparing for either 6 semiannual payments of nearly $27,000 or 360 monthly payments of $873.85 for a 30-year conventional mortgage.Complete the following loan amortization table by entering the correct answers. Notes: 1. As all values are denominated in U.S. dollars, you do not have to enter any dollar signs. 2. Round all interest payments down to the nearest whole dollar. 3. Rounding creates a situation in which the numbers in the loan’s final payment are often unequal. Notice in this problem, the ending balance for payment 6 is –$2. Therefore, your final payment would actually be reduced by $2 to $26,903. In the real world,…
- You plan to use a 15 year mortgage obtained from a local bank to purchase a house worth $124,000.00. The mortgage rate offered to you is 7.75%. You will make a down payment of 20% of the purchase price. a. Calculate your monthly payments on this mortgage. List in a spreadsheet the cash flow the bank expects to receive from you. Submit the spreadsheet with your answers. b. Calculate the amount of interest and principal for the 60th payment. Show your work. c. Calculate the amount of interest and principal to be paid on the 180th payment. Show your work. d. What is the amount of interest paid over the life of this mortgage?Your credit score is in the range of 720-739 and you want to buy a house in Davis (CA). You have 20% down payment to put on a house that has a market value of $450,000. a) Use www.bankrate.com website to identify the bank with the most convenient APR for your 30- year fixed mortgage and accordingly calculate your annual payment. Ignore external and additional costs in your calculation that may vary from one bank to another b) After 20 years of annual payment, how much you should pay in lump sum to your bank to end up all your debts. Ignore penalties or any other additional cost c) According to your finance, your maximum annual payment for your mortgage cannot exceed $24,000. Under this condition, how much should be your minimum down payment for your mortgage?You have a loan outstanding. It requires making three annual payments of $7,000 each at the end of the next three years. Your bank has offered to allow you to skip making the next two payments in lieu of making one large payment at the end of the loan's term in three years. If the interest rate on the loan is 3%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is $ (Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer.
- You obtain a 30-year home mortgage and your monthly payment is $3000.00. Instead of paying monthly as required, you ask the bank to allow you to pay $36,000 at the end of each year; the bank rejects that idea but says you could pay $36,000 at beginning of each year. Why does the bank reject your proposal and would you accept bank's suggestionYou plan to purchase a house for $115,000 using a 30-year mortgage obtained from your local bank. You will make a down payment of 20 percent of the purchase price and monthlypayments. You will not pay off the mortgage early. a. Your bank offers you the following two options for payment: Option 1: Mortgage rate of 9 percent and zero points. Option 2: Mortgage rate of 8.85 percent and 2 points. Which option should you choose?you are buying a house and will borrow $225,000 on a 30-year fixed reate mortgage with monthly payments to finance the purchase. your loan officer has offered you a mortgage with an APR of 4.3%. Alternatively, she tells you that you can “ buy down ” the interest rate to 4.05% if you pay points up front on the loan is 1 % ( one percentage point) of the loan value. you believe that you will live in the house for only eight years before selling the house and buying another house. this means that in eight years, you will pay off the remaining balance of the original mortgage. how many points, at most, would you be willing to pay to buy down the interest rate? Question) maximum points?