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You would like to purchase a vacation home when you retire 10 years from now. The current cost of the homes that interest you is $273,429; however, you expect their price to rise at 4.47% per year for the next 10 years. How much must you save each year in nominal terms (the same amount each year) for 14 years, starting next year, to just be able to pay for the vacation home if you earn 4.4% APR (compounded annually) on your investments?
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- You want to save the down payment required to purchase a vacation home at the end of four years. If the required down payment is $75,000 and you can earn 6% a year on your savings account, how much do you need to set aside at the end of each year for the next four years?When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be earning 6% per year. Find PV Annuity: If you wish to do that for 10 years starting one year after you retire, what does the balance in your retirement account have to be when you retire? Find PV Annuity: If the account will be earning 3% per year, and you wish to do that for 20 years starting on the day you retire, what does the balance in your retirement account have to be when you retire?Suppose you want to buy a $453,806 home. You can put $90,000 down and can finance at 4.1% APR Monthly for 30 years, but can only afford to pay $1,149, for the first five years, and have offered to make a balloon payment of $100,000 at the end of thirty years (your 360th payment). How much will your remaining payments be? (Assume all payments will be made at the end of each month, and that negative amortization is permitted.)
- You decide to buy a house costing $6,000,000. You pay $1,000,000 down, and the remainder will be paid in monthly installments over 25 years at 3.9% compounded monthly. a) What is the monthly payment? b) What is the outstanding balance after making the 100 th payment? c) What is the equity after making the 100 th payment? d) How much of the 100 th payment will go to principal and how much to interest? e) How much interest will paid over the entire length of the loan?You can afford payments of $950 per month for the purchase of a house. a) What is the largest amount you can finance for this house at 3.2% APR for 30 years? (Round to the nearest dollar.) b) How much total will you be paying the loan company at the end of 30 years for this house if you are paying $950 per month for 30 years? c) Now you are curious what the payments would be if you financed the amount found in part a) at 3.2% APR for 20 years instead of 30 years. How much would your monthly payments be if you financed the amount you found in part a) for 20 years at 3.2% APR? (Round to the nearest dollar.) d) Using the payments you found from part c), how much total will you pay the loan company at the end of 20 years?You’re buying your first house for $180,000, giving $35,000 as down payment. The amount you will finance will paid in 40 years with monthly interest rate of 0.5%. What is the value of the equal payments you will have to make for 30 years?
- If you are considering the purchase of a consol that pays $60 per year forever, and the rate of interest you want to earn is 10% per year, how much money should you pay for the consol?You decide to buy a house costing $5,000,000. You pay $1,000,000 down, and the remainder will be paid in monthly installments over 30 years at 3.5% compounded monthly. What is the monthly payment? What is the outstanding balance after making the 100th payment? What is the equity after making the 100th payment? How much of the 100th payment will go to principal and how much to interest? How much interest will paid over the entire length of the loan?You are thinking about buying a rental property. Because of the difficulty getting a loan, you are going to pay $350,000 in cash for the house today. You think you can rent out the property for the next 10 years, receiving $1,400 in cash each month after your expenses and taxes. At the end of ten years, you believe you will be able to sell the property for $425,000. If your discount rate is 7.2% annually with monthly compounding, what is the NPV of the rental property? (Assume first payment is 1 month from today)
- Suppose you want to purchase a home for $475,000 with a 30-year mortgage at 5.84% interest. Suppose also that you can put down 25%. What are the monthly payments? (Round your answer to the nearest cent.)$ What is the total amount paid for principal and interest? (Round your answer to the nearest cent.)$ What is the amount saved if this home is financed for 15 years instead of for 30 years? (Round your answer to the nearest cent.)You have found your dream house. The selling price is 120,000. You will put $20,000 down and obtain a 25-year fixed-rate mortgage at 8.75% (APR compounded semiannually) for the rest. You plan to prepay the loan by making an additional payment each month along with your regular payment. How much extra must you pay each month if you wish to pay off the load in 20 years? (Assume there is no early payment penalty).After making payments of $901.10 for 8 years on your 30 year loan at 8.3%, you decide to sell your home. What is the loan payoff?
