Required: Determine the APR, assuming that the ARM is made with a 2 percent annual and 5 percent over-the-life interest rate cap. (Do not round intermediate calculations.) APR
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- A loan applicant inquires about refinancing his primary residence. He reports receiving a competitor's quote of a 4.50% interest rate with no points. The mortgage loan originator (MLO) discovers that the best interest rate available at this time is 4.75% with no points. To get the applicant a 4.50% Interest rate, the applicant needs to pay a 1.00% discount point. Which of the following interest rates is the MLO permitted to offer to the applicant? AO A 4.00% interest rate with a 0.50% discount point A 4.25% interest rate with no points CO A 4.50% interest rate with no points A 4.50% interest rate with a 1.00% discount pointYou are a new loan officer with Alpha Mortgage, and the manager of the loan department has just presented a problem to you. He is unable to complete the APR calculation on an adjustable rate mortgage which a borrower applied for yesterday. The loan features initial payments basedon a 10 percent rate of interest, while the current composite rate on the loan is 13 percent. No discount points have been paid by any party to the transaction, and any difference between borrower payments and the interest payment required at the composite rate will be accrued in themortgage balance in the form of negative amortization. The mortgage amount desired by the borrower is $65,000 for a 30-year term, but a one-time mortgage insurance premium of $2,400 is being funded as a part of the loan amount, making the total loan balance $67,400. The borrower is paying $1,600 in prepaid finance charges at closing.a. Determine the APR, assuming that the ARM is made with a 2 percent annual and 5 percent…A borrower has two alternatives for a loan: (1) issue a $360,000, 75-day, 6% note or (2) issue a $360,000, 75-day note that the creditor discounts at 6%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. $ ________________________ Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $360,000, 75-day, 6% interest-bearing note: $___________________________ (2) $360,000, 75-day note discounted at 6%: $ _________________________
- You are the loan department supervisor for the Pacific National Bank. The following installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate, and the payoff for each loan. Enter the rebate fraction in this form: numerator / denominator (e.g., 82/165). Do not round intermediate calculations. Round your answers for finance charge rebate and loan payoff to the nearest cent. Do not reduce to lowest terms. Finance Amount Number of Monthly Payments Rebate Charge Loan Financed Payments Payment Made Fraction Rebate Payoff $1,500 30 $105.2 22A borrower has two alternatives for a loan: (1) issue a $420,000, 30-day, 6% note or (2) issue a $420,000, 30-day note that the creditor discounts at 6%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. $ fill in the blank 2 for each alternative. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $420,000, 30-day, 6% interest-bearing note: $ fill in the blank 3 (2) $420,000, 30-day note discounted at 6%: $ fill in the blank 4 Alternative 1 is more favorable to the borrower because the borrower receives more cash .Can you please explain in detail how to work out this problem? Lane French had a bad credit rating and went to a local cash center. He took out a $300 loan payable in one month at $310. What is the percent of interest paid on this loan? Round your answer to the nearest hundredth of a percent
- Johnny Rockefeller had a bad credit rating and went to a local cash center. He took out a $100.00 loan payable in two weeks for $111.50. What is the percent of interest paid on this loan? Note: Do not round intermediate calculations. Round your answer to the nearest whole percent. Percentage of interest paid:You are considering taking out a loan from the so-called “Tiger B. Shark” finance company. The company’s leaflet states that the loan you plan to take will be settled on a “four-for-five” weekly basis. You ask your friend, who works in the banking industry, for advice on the following issues related to the loan. (a) What is the weekly interest rate charged on the loan as implied by the phrase “four-for-five weekly basis” in the leaflet? (b) What is the effective yearly rate of this loan? Assume that each year has exactly 52 weeks. (The final answer should be rounded to two decimal places in percentage.) (c) Suppose you plan to borrow $10,000 under the terms set out in the leaflet for one year (counted as 52 weeks according to the loan contract). (i) If you make no interest or principal repayments during the period, how much will you have to repay in 52 weeks and how much interest in total will you have to pay for the loan? [Note: Round the final answer to an…Suppose that you owe $2,000 on a credit card that charges 18% APR and you pay either the minimum 10% or $20, whichever is higher, every month. How long will it take you to eliminate the debt? Assume that the bank uses the previous-balance method to calculate your interest, meaning that the bank does not subtract the amount of your payment from the beginning balance but charges you interest on the previous balance.
- Calculate the missing information for the following loan. Round days to the next higher day when necessary. Do not enter units in your answer. Do not round intermediate calculations. Principal Rate (%) Time (days) Interest Method Interest Maturity Value $ 60,000 10.6 Exact $3,800 $63,800One of your customers is delinquent on his accounts payable balance. You've mutally agreed to a repayment schedule of $520 per month. You will charge .92 percetn per month interest on the overdue balance. If the current balance is $14740, how long will it take for teh account to be paid off?Need hood explanation, don’t use excel please. Tsinoor takes out a loan of $6800. He will repay the loan over 5-years with semi-annual payments of $816 (first payment due in 6-months). Using linear interpolation, what rate of interest, j2 is being charged on the loan?