Consider a pool of mortgages totaling $1,000,000. The interest rates is 5% and the mortgages are amortized over three years making yearly payments. Like we did in class, convert this pool into a series of 5% annual coupon bonds with maturities of one, two and three years.
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Consider a pool of mortgages totaling $1,000,000. The interest rates is 5% and the mortgages are amortized over three years making yearly payments. Like we did in class, convert this pool into a series of 5% annual coupon bonds with maturities of one, two and three years.
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- Assume that you have a thirty-year mortgage for $200,000 that carries an interest rate of 9.00%. The mortgage was taken three years ago. Since then, assume that interest rates have come down to 7.50%, and that you are thinking of refinancing. The cost of refinancing is expected to be 2.50% of the loan. (This cost includes the points on the loan.) Assume also that you can invest your funds at 6%. Should you refinance? Give mathematical explanation.You have just negotiated a home mortgage with a principal of $350,000. The bank's quoted rate is 6.3%. You chose a 20-year amortization and you decide to make 12 payments per year. Each mortgage payment is $2,551.90. How much interest do you pay in the first year? Express your answer as a percentage of the total value of your mortgage payments in the first year. The interest as a percentage of the total payments in year 1 is 71.1825 %. (Round to four decimal places as needed.)Explain on excel spread sheet....Your local bank has offered you a mortgage of 100,000). The mortgage is to be paid back over 10 years in annual payments, and the bank charges 12% annual interest. Calculate the annual mortgage payments What is the mortgage EAIR?
- You purchased a bond and will receive $500every six months for the next five years. If the market rateof interest is 4%, what is the present value of your stream ofinterest payments? (a stream of equal interest payments isconsidered an annuity).You have an opportunity to purchase a bond that will pay out $815 in 10 months. If you would like to earn at least a 2.2% annual rate of simple interest on your investment, what is the largest amount the you should pay for the bond? Round your answer to the nearest cent.You wish to purchase a $1,000 bond from a friend who needs the money. There are 7 years remaining until the bond matures, and interest payments are quarterly. You decide to offer $750.08 for the bond because you want to earn exactly 16% per year compounded quarterly on the investment. What is the annual bond rate of interest?
- Assume we have a $500,000 mortgage at a 3.5% original interest rate, 30-year term, and monthly payments. The interest rate can be adjusted at the end of each year, and we assume the rate increases by 0.25% after the first year. What is the monthly payment for the 4th year of the loan?Find the purchase price of each bond bought on the given dividend date. Use another sheet of paper for your solution. 1. An amortized loan of P100, 000 with an interest rate of 8% per annum will be paid quarterly for 1 years. Determine the periodic payment. Then construct the amortization schedule. 2. Dra. Saldaña bought a home theater set at P200, 000 amortized in 3 years at 6% compounded monthly. Prepare the amortization schedule.Please show how to solve this using an Excel spreadsheet and please show the formulas. The maturity of the balloon loan is 5 years, amortization period is 30 years, loan amount is $85,000 with annual interest rate 4.5% and monthly payments. What is the monthly payment for this balloon mortgage? What is the balloon payment at the end of five years for this balloon mortgage?
- Please do both correctly, I'll rate the answer Question: (i) A $10,000 bond is purchased for $9600 and has a bond rate of 6% per year payable semiannually for 2 years. What is the interest rate? (ii) You borrow 35,000 for 10 years at 10% per year compounded monthly. After making 24 payments you decide to pay the loan off. What's that payoff amount?You have decided to get a $5,000,000 balloon mortgage with the following characteristics: 5 years amortization with monthly payments, 10% interest rate, $2,500,00 balloon amount in year 5. What is the monthly payment?If you want to receive $500 every three months for 10 years by investing in a bond that has a face value of $10,000 and a yield interest rate of 8% annually, what would be the value of this bond?