1- | Monthly Payment =Using PMT function in MS excel | Pmt(rate,nper,pv,fv,type) rate = 5.6/12 =.46666% nper =12*20 =240 pv = 2250000=fv =0 type =0 | PMT(0.46666%,240,2250000,0,0) | ($15,604.72) | |
2- | Price of property | Initial investment*(1+r)^n | 2500000*1.1^6 | 4428902.5 | |
3- | balance in Loan account | amount finance*(1+r)^n - monthly payment*FVAF At .46666% for 72 months | 2250000*(1.00466)^72 - (15604.72*85.19478) | 1815109.562 | |
Equity in House | cost of property-balance in mortgage | 2500000-1815109.562 | 684890.44 | ||
FVAF at .46666% for 72 months | (1+r)^n-1 /r | (1.00466)^72- 1 / .46666% | .39757/.46666% | 85.1947885 | |
4- | Amount they would earn if downpayment is invested into saving account | amount of down payment*(1+rate of return)^n | 250000*(1.1)^6 | 442890.25 |
6. Six years ago, an investor bought a property for $2.5 million with 10% down and...
if an investor bought a 6% annual coupon bond for $1020 and sold it 2 years later for $1080, the annual rate of return on her 2-year investment will be a)10.65% b)17.65% c)11.76% d)8.47%
Suppose that 10 years ago you bought a home for $130,000, paying 10% as a down payment, and financing the rest at 7% interest for 30 years. Your existing mortgage (the one you got 10 years ago) How much money did you pay as your down payment?
Ms. Juliet bought a house for $360,000 exactly five years ago. After making a 20% down-payment, she borrowed the rest of the house payment in the form of a 15-year mortgage from her local cooperative credit union. She negotiated a mortgage rate of 3.5% APR with semi-annual compounding. She makes mortgage payments of an equal dollar amount every two weeks (i.e., biweekly), and her first mortgage payment was due two weeks after she signed the mortgage contract. If Ms....
Exactly six years ago, Cathy bought her dream home using a 30-year mortgage with an APR of 6.5% on a $230,000 loan. She has been making her monthly payments. Today, she came to know that her bank is offering a special mortgage refinance offer at an APR of 4.25% on 20-year mortgages. How much will Cathy’s monthly payment change, if she decides to refinance today? Original loan Years Ago (N) 6.00 years Term (years, N0) 30.00 years APR...
Name Real Estate Valuation Problems 1. If an investor has found a possible investment property with the net income after all operating expenses but before capital recapture from a small apartment house is estimated to be $48,000 per year: How much would an investor be willing to pay for the property if first mortgages are available for 75% the purchase price at 5.5% interest and the investor's equity capital investment requires a 15% return. The remaining life of the buildings...
Ms. Juliet bought a house for $360,000 exactly five years ago. After making a 20% down-payment, she borrowed the rest of the house payment in the form of a 15-year mortgage from her local cooperative credit union. She negotiated a mortgage rate of 3.5% APR with semi-annual compounding. She makes mortgage payments of an equal dollar amount every two weeks (i.e., biweekly), and her first mortgage payment was due two weeks after she signed the mortgage contract. d. What is...
1.An investor bought Stock A and Bond B at the beginning of 2018, and sold them at the end of 2018, given the following information: (10 points) Stock Price at the beginning of Price at the end of Cash dividend during 2018 2018 the year A $10 $10 $2 Bond Price at the beginning of Price at the end of Coupon payment during 2018 2018 the year B $18 $2 (1) For the l-year holding period, compute the return of...
A property is bought 5 years ago for $250,000 putting 20% down and financing the rest for 30 years with a fixed-rate loan of 5% a year. What is the monthly payment of the loan? Using the "housing" tab, how much equity is in the property today? What percent of the equity today is due to the paying down of the principal? What percent is due to the increase in the value of the property? Where did the rest come...
A savvy investor paid $5,000 for a 20-year $10,000 mortgage bond that had a bond interest rate of 10% per year, payable quarterly. Three years after he purchased the bond, market interest rates went down, so the bond increased in value. If the investor sold the bond for $13,000 three years after he bought it, what rate of return did the investor make per quarter and per year (nominal)? The rate of return per quarter is D % The rate...
Six years ago the Singleton Company issued 20-year bonds with a 14% YIELD TO CALL annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of 7-8 with return for an investor who purc they were called. Explain why the investor should or should not be happy that Singleton the bonds when they were issued and held them until called them