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lyudmila [28]
3 years ago
12

you need a 20-year, fixed-rate mortgage to buy a new home for $210,000. Your mortgage bank will lend you the money at a 7.1 perc

ent APR for this 240 month loan. However, you can afford monthly payments of $1,000, so you offer to pay off any remaining balance at the end of the loan in the form of a single balloon payment. HOw large will this balloon payment have ot be for you to keep your monthly payments at $1000
Business
1 answer:
Delicious77 [7]3 years ago
3 0

Answer: $337,869.73

Explanation:

Find out the future value of $1,000 given an interest rate of 7.1%. If this amount is less than the future value of $210,000, the difference is added to the final payment to come up with the balloon payment.

The APR needs to be made periodic:

= 7.1% / 12

The $1,000 payment is an annuity so this can be calculated as:

= Annuity * ( ( 1 + rate) ^ number of periods - 1) / rate

= 1,000 * ( ( 1 + 7.1/ 12%) ²⁴⁰ - 1) / 7.1/12%

= $527,297.83

Future value of $210,000

= 210,000 * ( 1 + 7.1/ 12%) ²⁴⁰

= $865,167.56

Balloon payment will be:

= 865,167.56 - 527,297.83

= $337,869.73

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1. It has worsened

2. Yes (refer details below)

3. Refer details below

Explanation:

1. Performance

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2. Concerns

One of the most important concern for the company is its declining sales. It shows that the products are not competitive. Current ratios indicates liquidity crisis since they are decreasing.

3. Recommendations

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Rudik [331]

Answer:

Cutoff.

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Answer:

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On other hand,capital gains yield is the percentage increase of the share price over time. In other words, the share price growth rate,which is a market expectation of the company's performance.The g given in the question depicted this.

Without mincing words,the expected rate of return on the stock is dividends yield(DIV1/P0) plus the capital gains yield(g)

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