Jim Thomas borrows $70,000 at 12 percent interest toward the purchase of a home. His...
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Jim Thomas borrows $70,000 at 12 percent interest toward the purchase of a home. His mortgage is for 30 years. Use Appendix D. (Round "PV Factor" to 3 decimal places. Round the final answer to nearest whole dollar.) a. How much will his annual payments be? (Although home payments are usually on a monthly basis, we shall do our analysis on an annual basis for ease of computation. We get a reasonably accurate answer.) Annual payments $ b. How much interest will he pay over the life of the loan? Amount of interest $ c. How much should he be willing to pay to get out of a 12 percent mortgage and into a 10 percent mortgage with 30 years remaining on the mortgage? Assume current interest rates are 10 percent. Carefully consider the time value of money. Disregard taxes. Amount to be paid $
Jim Thomas borrows $70,000 at 12 percent interest toward the purchase of a home. His mortgage is for 30 years. Use Appendix D. (Round "PV Factor" to 3 decimal places. Round the final answer to nearest whole dollar.)
a. How much will his annual payments be? (Although home payments are usually on a monthly basis, we shall do our analysis on an annual basis for ease of computation. We get a reasonably accurate answer.)
Annual payments $
b. How much interest will he pay over the life of the loan?
Amount of interest $
c. How much should he be willing to pay to get out of a 12 percent mortgage and into a 10 percent mortgage with 30 years remaining on the mortgage? Assume current interest rates are 10 percent. Carefully consider the time value of money. Disregard taxes.
Amount to be paid $
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