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hichkok12 [17]
3 years ago
6

Your mortgage is a 30-year fixed at 8% on $150,000. You are considering refinancing at 3.5% fixed for 30 years. The bank charges

you 1.5% of your debt in closing fees. Approximately how long will it take you to recoup the closing fees from the reduced loan payment amount?
a) 4 months
b) 15 months
c) 2 years
d) 30 years
Business
2 answers:
Ilya [14]3 years ago
8 0

Answer:

Option A,4 months

Explanation:

Closing fees =1.5% of the mortgage

mortgage amount is $150,000

closing fees =$150,000*1.5%=$2250

The mortgage monthly payment can be computed using the pmt formula in excel as follows:

=pmt(rate,nper,-pv,fv)

rate is the rate per month which is 3.5%/12=0.002916667

nper is 30 years multiplied by 12 =360

pv is the amount of mortgage which is $150,000

fv is the sum of the interest on mortgage and mortgage amount which is unknown

=pmt(0.002916667 ,360,-150000,0)= 673.57  

the final answer=closing fees/monthly payment=$2250 /$673.57  = 3.34  months

The closest option is 4 months

Gre4nikov [31]3 years ago
3 0

Answer:

The answer is a) 4 months.

Explanation:

I just got this question earlier and the answer is A. I tried the same strategy as the one above and it works. The answer is 4 months since 3.34 is close to 4 months.

Hope this helps!!

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Answer:

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Using this formula

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Let plug in the morning

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7 0
3 years ago
Assume the following data concerning a purchase of merchandise by Icon Co. on April 2:
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The purchase amount that Icon Co. would record on April 2 would be: <u>c. $4,000</u>.

<h3>What is the purchase amount to be recorded?</h3>

The purchase amount that should be recorded on the date of purchase is the amount of the transaction.  This does not take into account the return and discount which happened later.

This implies that Icon Co. will reduce the purchase amount on April 4 when half of the goods were returned with a contra entry.  And discount will be based on the balance of $2,000 instead of $4,000.

<h3>Data and Calculations:</h3>

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Learn more about recording credit purchases at brainly.com/question/5651500

6 0
2 years ago
Santorino Company produces two models of a component, Model K-3 and Model P-4. The unit contribution margin for Model K-3 is $6;
tresset_1 [31]

Answer:

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Explanation:

The question falls under the limiting factor analysis

<em>When a business is faced with a problem of shortage of a resource which can be used to produced more than one product type, to maximize the use of the resource , the business should allocate it for production purpose in such a way that </em><em>it maximizes the contribution per unit of the scare resource.</em>

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$0.4 per minutes× 60

= $24 per hour

7 0
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