Question

will give medal. please help.

Ella obtains a $750,000 balloon mortgage for an investment property. The mortgage has terms of 15/3 at an interest rate of 5.5%. The monthly payment is $6,128.13. How much is the remaining balance after 3 years rounded to the nearest dollar?

Answer 1

@jim_thompson5910 @AccidentalAiChan

Answer 2

@isag can u help me?

Answer 3

According to the mortgage calculator from http://www.mlcalc.com/ I'm getting $648,106.64

Answer 4

then round that to the nearest dollar to get $648,107

Answer 5

that's not it :(

Answer 6

dang...hmm, what are your answer choices?

Answer 7

also, does it give you a formula to work with? It's possible they're altering the formula a bit

Answer 8

According to this calculator

http://tcalc.timevalue.com/all-financial-calculators/mortgage-calculators/balloon-mortgage-calculator.aspx

it's saying that the balloon payment is $651,076.97 which rounds to $651,077

Answer 9

So maybe that's what they want?

Answer 10

$529,387

$644,949

$704,391

$600,000

Answer 11

no, no formula. idk it

Answer 12

ok one sec

Answer 13

ok now I'm turning to the formula found here

http://www.financeformulas.net/Loan_Balloon_Balance.html

Answer 14

And I get...


FV = PV(1+r)^n - P*((1+r)^n-1)/r


FV = 750000(1+0.055/12)^(12*3) - 6128.13*((1+0.055/12)^(12*3)-1)/(0.055/12)


FV = 644,948.841110999


FV = 644,949 ... rounding to the nearest dollar

Answer 15

FV = future value (ie the remaining balance at some point in time)

PV = present value (which is the original balance...aka the total loan amount)

r = interest rate per period (per month in this case)

n = number of payments

P = monthly payment

Answer 16

So in this case

FV = unknown for now
PV = 750,000
r = 0.055/12
n = 12*3
P = 6,128.13

Answer 17

thank u so much !! can u help me with 2 more please

Answer 18

Brandon has purchased a home for $352,000. He made a 15% down payment and financed the remaining amount. The intangible tax is 0.4%. Which of the following is the total amount of the intangible tax?

Answer 19

The definition of intangible tax is a bit vague, but it sounds like we're just taking 0.4% of the current value of the home.

Answer 20

yeah it is vague. they should explain better

Answer 21

if so, then 352,000*(0.4/100) = $1,408 is the intangible tax

Answer 22

thank u !!!

An $800,000 balloon mortgage has terms of 30/5 with a 5% interest rate. What is the monthly payment rounded to the nearest dollar?

Answer 23

using this calculator again

http://tcalc.timevalue.com/all-financial-calculators/mortgage-calculators/balloon-mortgage-calculator.aspx

it's saying: Payment amount $4,294.57

Answer 24

Ridley obtains a 20-year 6.3% fixed rate mortgage for $323,500. The monthly payments are about $2,374. What is the total amount of interest for Ridleys mortgage?

Answer 25

thanks so much !!

Answer 26

that online calculator u are using.. I can never figure it out

Answer 27

which one? I'm using a few calculators

Answer 28

this is what I did for the last problem I posted

Answer 29

oh ok perfect.. thanks ! I see

Answer 30

notice how the down payment is 0% (ie we have NOT put any down payment down and we're financing all of the $800,000)

Answer 31

A mortgage is in the amount of $300,000. The origination fee is 0.7%, the intangible tax is 0.3%, and there are 2.3 discount points. Which of the following is the total cost of the origination fee, intangible tax, and discount points?

I have this one.. im going to try with that calculator and u tell me if I get it right

Answer 32

and I'm sure you know this already, but when they say "30/5 balloon mortgage" they mean "treat it like a 30 year mortgage BUT the balloon payment happens at the start of the 5th year"

Answer 33

oh ok.. didn't know that

Answer 34

yeah it's a bit strange, but you pay normal monthly payments for the first 4 years, then you pay the balloon payment (which is the huge remaining balance) at the start of year 5

Answer 35

I just don't know where to put 0.7% and 0.3 and 2.3 in the calculator

Answer 36

one sec

Answer 37

The bank offers Manfred a fixed rate loan with no points and a fixed rate loan with points. The difference in monthly payments between the loan with points and the loan without points is $38.42. The cost of the points is $2,300. What number is closest to the break-even point rounded to the nearest month?

I have this one too. I cant wait to be done

Answer 38

ok I did not know this, but apparently a discount point lowers the interest rate and they usually cost 1% of the loan. Unfortunately this isn't a hard set rule, but we'll go with it

http://www.investopedia.com/terms/d/discountpoints.asp

Answer 39

So if you purchase 2.3 discount points, then it will cost 2.3*1 = 2.3% of the loan

Answer 40

yes

Answer 41

Add up the percentage points:

0.3+0.7+2.3 = 3.3

Then take 3.3% of the amount loaned

(3.3/100)*300,000 = 9,900

So it seems that the total cost of the origination fee, intangible tax, and discount points is $9,900

Answer 42

This amount may be added to the balance or the amount you have to pay up front.

Answer 43

okay. I see

Answer 44

thank u !!

Answer 45

np

Answer 46

do u know this one. The bank offers Manfred a fixed rate loan with no points and a fixed rate loan with points. The difference in monthly payments between the loan with points and the loan without points is $38.42. The cost of the points is $2,300. What number is closest to the break-even point rounded to the nearest month?

Answer 47

that's my last one

Answer 48

one sec

Answer 49

let p1 be the payment made with no points
let p2 be the payment made with points

since the difference in the payments is $38.42, we know that

p1 - p2 = 38.42

Now let y be the total cost so far after x months

For the loan without points, we can say

y = p1*x

For the loan with points, we can say

y = p2*x + 2300 ... note: remember to add on the cost of the points

now we have this system


y = p1*x
y = p2*x + 2300


and subtract to get

y = p1*x
y = p2*x + 2300
----------------
0 = (p1-p2)*x - 2300

so we have

0 = (p1-p2)*x - 2300

0 = 38.42*x - 2300

2300 = 38.42*x

2300/38.42 = x

59.8646538261322 = x

x = 59.8646538261322

So that rounds to 60 months (60/12 = 5 years)

Answer 50

thank u !! I just submitted it. I got 26 out of 40 points. some we did were wrong :(

Answer 51

so the last one wasn't 60 months?

Answer 52

does it say which ones were wrong?