1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
sergejj [24]
3 years ago
11

1. Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest

for 30 years. How much money did you pay as your down payment?
2. How much money was your existing mortgage (loan) for?
3. What is your current monthly payment on your existing mortgage? Note: Carry at least 4 decimal places during calculations, but round your final answer to the nearest cent.
4. How much total interest will you pay over the life of the existing loan?
5. This year (10 years after you first took out the loan), you check your loan balance. Only part of your payments have been going to pay down the loan; the rest has been going towards interest. You see that you still have $112,681 left to pay on your loan. Your house is now valued at $180,000.
6. How much of the original loan have you paid off (i.e, how much have you reduced the loan balance by?
7. How much money have you paid to the loan company so far (over the last 10 years)?
8. How much interest have you paid so far (over the last 10 years)?
9. How much equity do you have in your home (equity is value minus remaining debt)?
10. Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate. If you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your new monthly payments be?
11. Notice that if you refinance, you are going to be making payments on your home for another 30 years. In addition to the 10 years you’ve already been paying, that’s 40 years total. How much will you save each month because of the lower monthly payment?
12. How much total interest will you be paying (consider the interest you paid over the first 10 years of your original loan as well as interest on your refinanced loan)?
13. Now the non-computational question: Does it make sense to refinance?
Business
1 answer:
Ierofanga [76]3 years ago
4 0

Answer:

1. Down payment = $15,000

2. The existing mortgage (loan) was for $135,000

3. The current monthly payment on the existing mortgage is $990.58

4. The total interest over the life of the existing loan = $221,609.58

6. The amount of the original loan paid off is $22,319.

7. Total amount paid to the loan company over the last 10 years is $258,928.58 ($243,928.58 + $15,000)

8. Total interest paid over the last 10 years is $221,609.58

9. The equity in the home is $67,319 ($180,000 - $112,681)

10. The new monthly payments will be $675.58

11. Saving each month because of the lower monthly payment is $315 ($990.58 - $675.58)

12. Total Interest = $352,137.21 ($221,609.58 + $130,527.63)

13. It does not make sense to refinance because what is saved per month cannot compare with the additional interest expense to be incurred for prolonging the payments.

Explanation:

a) Data and Calculations:

1. Cost of a home = $150,000

10% down payment = $15,000

Existing Mortgage = $135,000 ($150,000 - $15,000)

Home Price  150000

 Down Payment  10 %

Loan Term  30  years

Interest Rate  8%

House Price $150,000.00

Loan Amount $135,000.00

Down Payment $15,000.00

Total of 360 (30 years * 12)

Mortgage Payments $356,609.58

Total Interest $221,609.58

Ten years after, the loan balance has been reduced by $22,319 ($135,000 - $112,682)

Refinancing calculations:

Home Price  112681

 Down Payment  0 %

Loan Term  30  years

Interest Rate  6

   

Monthly Pay:   $675.58 Monthly

Total Mortgage Payment $243,208.63

Total Out-of-Pocket $243,208.63

Total of 360 Mortgage Payments $243,208.63

Total Interest $130,527.63

 

You might be interested in
Starting an investment portfolio at a young age means:
Zinaida [17]

Answer:

c. There is greater potential for high yield over a longer period

Explanation:

6 0
3 years ago
Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to th
Nezavi [6.7K]

Answer:

The agency agreement is terminated upon destruction of the property.

4 0
2 years ago
EASY!! Please help!! 25 points
aniked [119]

Answer:

Corporation

Explanation:

3 0
2 years ago
Becker Bikes manufactures tricycles. The company expects to sell 540 units in May and 670 units in June. Beginning and ending fi
vaieri [72.5K]

Answer:

Explanation:

Sales budget for may = 540

Sales budget for June = 670

Opening inventory for may = 190

Closing inventory for May = 155

Production in may =( 190+540)-155=575

Opening inventory in June = 155

Closing inventory = 165

Production in June = (155+670)-165=660

May material needs = 3(575+ (20%*660)

=3*707=2121 wheels

2121*24=$50,904

June material needs =3(660+(20%*640)

3*788=2364

2364*24=$56,736

7 0
2 years ago
When total revenues fall below total costs, production should end. However, if marginal revenue exceeds variable cost, productio
const2013 [10]

Answer:

False

Explanation:

A firm should end production and shut down only when its total revenue falls below variable costs, because at this point, production will bring about more losses, compared to if the company isn't producing at all.

<u>If total revenue exceeds and can cover its variable cost, a firm should remain in operation in the short run</u> (even if it is incurring losses), as this contributes to paying off the firm's fixed costs.

8 0
3 years ago
Other questions:
  • Factors of production, such as physical capital, human capital, and technological knowledge, are crucial to economic growth. The
    13·1 answer
  • The acquisition costs of property, plant, and equipment do not include: a. The ordinary and necessary costs to bring the asset t
    9·1 answer
  • Joshua wants to be a lawyer. He found the following table on the Bureau of Labor Statistics’ website to find out about the emplo
    12·2 answers
  • Held-to-maturity securities are equity securities a company intends and is able to hold until maturity true or false
    7·1 answer
  • Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interes
    12·1 answer
  • What is the majority of our federal budget devoted to? (What
    10·1 answer
  • The process begins when a customer steps into line and ends when the customer receives the receipt and leaves the store. The pro
    12·2 answers
  • An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $4
    9·1 answer
  • A relevant cost ______. Multiple select question. differs between alternatives is always an opportunity cost pertains to the fut
    5·1 answer
  • Pleas help!! Please!!!
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!