# accounting

posted by .

House mortgage
You have just purchased a house and have obtained a 30-year, \$200,000 mortgage with an interest rate of 10 percent.

Required:
a. what is your annual payment?
b. Assuming you bought the house on Jan. 1st, what is the principle balance after one year?
c. After four years, mortgage rates drop to 8 percent for 30-year fixed-rate mortgages. You still have the old 10 percent mortgage you signed four years ago and you plan to live in the house for another five years. The total cost to refinance the mortgage is \$3,000 including legal fees, closing costs and points. The rate o a five-year CD is 6 percent. Should you refinance your mortgage or invest the \$3,000 in a CD? The 6 percent CD rate is your opportunity cost of capital.

a. The present value of a mortgage equals the period payment times the annuity factor

? =

Payment =

Payment =

b. After one year: Principal =
=

After ten years: Principal =
=

c. The remaining principal after year 4 is

Principal =
=

If the house is remortgaged at 8 percent, the payments are

? =
Payment =
Payment =

The difference between the two payments is ? The present
value of the incremental difference over five years is

PV of Savings =
=

## Similar Questions

1. ### finance

You have purchased a house and have obtained a 30-year, \$ 200,000 mortgage with an interest rate of 10%. What is your annual payment?
2. ### math

Lauren and mark obtained a 20 year 120,000 conventional mortgage at 10.5% on a house selling 150,000. their monthly mortgage payment including principal and interest is 1197.60. determine the total amount they will pay for their house. …
3. ### Finance

Say that you purchase a house for \$270,000 by getting a mortgage for \$235,000 and paying a \$35,000 down payment. If you get a 15-year mortgage with a 8 percent interest rate, what are the monthly payments?
4. ### math

Ever wonder how much a house “actually” costs?
5. ### accounting

You have just purchased a house and have obtained a 30-year, \$200,000 mortgage with an interest rate of 10 percent. Required: a. what is your annual payment?
6. ### public finance

Your annual income is \$50,000. You want to take out a mortgage loan to buy a house. The rule on mortgage loan requires that your annual mortgage payment cannot exceed 30% of your annual income. If the current interest rate is 5% for …
7. ### Economics

Calculate the total dollar amount paid for a house purchased for \$200,000. The buyer paid \$50,000 as down payment and the remaining \$150,000 was obtained with a closed mortgage having a 25 year loan at 10% interest compounded semi-annually …
8. ### Finance

Say that you purchase a house for \$150,000 by getting a mortgage for \$135,000 and paying a \$15,000 down payment. Assume you get a 15-year mortgage with a 6 percent interest rate. If the house appreciates at a 2 percent rate per year, …
9. ### Math

You have a \$200,000 mortgage. You have had the house for one year. The rate is 7.5% fixed for 30 years. Rates have come down and you are thinking of refinancing at the new rate of 6%. 1) What is your mortgage payment and interest on …
10. ### Math

You have a \$250,000 mortgage. The 30- year fixed rate is 8.5%. You have had your house for ten years. You have 20 years remaining on your mortgage. The new 15-year mortgage rate is 5.5%. 1) What is your mortgage payment, principal …

More Similar Questions