If a payment cap is applied and the required payment does not cover the interest expense, the unpaid interest is added to the lo
1 answer:
You might be interested in
Answer:
- <u><em>7.67%</em></u>
Explanation:
Monthly payments from <em>mortgages</em> are calculated with the compounding montly interest rate.
Thus, you can "calculate" the monthly rate and the multiply by 12 to obtain the <em>APR</em> (annual percentage rate).
The equation for the <em>monthly payment </em>is:
- Loan = 80% × $1,800,00 = $1,440,000
- Monthly payment = $10,800
- t = number of months = 25 × 12 = 300
Substitute:
You must find r but it is very difficult to make it the subject of the equation; thus, the best is to do succesive calculations:
Tests:
r monthyly payment
- 0.01 $15,166.43 > $10,800 ⇒ lower
- 0.005 $ 9,277.94 < $10,800 ⇒ increase
- 0.006 $10,362.08 pretty close; increase a little bit
- 0.00639059 $10,800 ↔ this is the number
Multiply the rate by 12 (to obtain the APR): 0.00639059 × 12 = 0.07668708 = 7.67%.
- APR = 7.67% ← answer
Missing Question Data:
As the Question is missing relevant data, I have searched for it online and found a question similar. The data is attached in a picture file. It might be a little different from your actual question but same approach can be used to solve the question.
Answer with Explanation:
For simplicity, we denote the compensations with variable <em>x </em>and the stock return with variable <em>y.</em> Let us first find the mean and standard deviation for both compensation (x) and return (y).
Mean of Compensation (<em>x) </em> will be,
Mean of Stock Return (y) will be,
Standard Deviation for Compensation (x) is given by,
Standard Deviation for Compensation (x) is given by,
To find the predicted stock return, we have to use the equation for of line of regression,
where,
Equation (1) will become,
.
