Question

Nevaeh finances $147,500 to purchase a townhouse with a 30/8 balloon mortgage at 3.6%. What is the remaining balance at the end of the mortgage?

$83,122.40
$93,916.00
$113,753.73
$122,166.82

Answer 1

@zepdrix

Answer 2

@wio

Answer 3

hmm...

Answer 4

what do you mean by 30/8 baloon morgage?

Answer 5

The 30 means that the beginning fixed monthly payments are going to be calculated as if
the mortgage would be paid off in 30 years. The 8 means that fixed payments will be made for 7 years

Answer 6

sorry for 8 years

Answer 7

147000*(3.6)^30?

Answer 8

@zepdrix

Answer 9

there is a formula for this.

Answer 10

@mathmate can you help me

Answer 11

hello @mathmate

Answer 12

are you there @mathmate

Answer 13

@hero can you help me out here

Answer 14

Yeah, I am on something. I will help you if no one does, a little later on!

Answer 15

oh ok @mathmate

Answer 16

@jim_thompson5910 right?

Answer 17

let me think

Answer 18

ok a calculator is best for this

go here

http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx

and type in what you see in the attached image I'm posting

Answer 19

instead of hitting "calculate"

hit the "show amortization schedule" button which is below the calculate button

let me know when you've done that

Answer 20

alright did it @jim_thompson5910

Answer 21

ok so 8 years from now is 2015+8 = 2023

scroll down til you get to the row that starts with June 2023

Answer 22

what is the dollar figure in the last column of that row?

Answer 23

$122,166.82

Answer 24

good

Answer 25

Aaliyah obtained a 25-year, fixed rate mortgage for $220,500 on a home that cost her $243,950. If the interest rate on the mortgage is 6.15%, how much interest will Aaliya pay over the life of the mortgage?

Answer 26

Would this one be the same thing?

Answer 27

that's the remaining balance after 8 years

that amount is to be paid off or refinanced somehow

Answer 28

you can use the same calculator, yes

Answer 29

wait but it gives me two values @jim_thompson5910

Answer 30

what do you mean?

Answer 31

because it says that she is recieving a fixed rate

Answer 32

that she got at first for 243950

Answer 33

do i plug in for the mortgage value 220,500

Answer 34

hmm not sure, but let me think

Answer 35

yeah thats what got me confused at the beginning

Answer 36

does it give you any answer choices?

Answer 37

$257,766
$188,341
$234,316
$211,791

Answer 38

ok you're going to type in 220500 into the "Mortgage amount" box

Answer 39

6.15 is the interest rate
25 is the number of years

use that calculator to figure out the monthly payment and tell me what you get

Answer 40

I got 1,440.97

Answer 41

@jim_thompson5910

Answer 42

that's the monthly payment

multiply that by 300

300 months = 25 years * (12 mon/1 year)

Answer 43

so that would be 432291

Answer 44

@jim_thompson5910

Answer 45

now subtract off the mortgaged amount

432,291-220,500 = 211,791

Answer 46

Riley made a 18% down payment on a home that cost $212,400. He financed the remaining amount using a 25-year, fixed-rate mortgage at 5.85%. His monthly payment will be $1,106.25. Riley will pay for two discount points, a 0.5% origination fee, brokerage fee, state documentary taxes on the deed and the mortgage, and the intangible tax.


Discount points equal 1% of the mortgage amount.
Documentary stamp tax on deed is $0.70 per $100 or portion thereof.
Documentary stamp tax on mortgage is $0.35 per $100 or portion thereof.
Mortgage broker fee is $185 plus 3% of the mortgage amount.
Intangible tax is 0.2% of the mortgage amount.


What is the total cost of Riley’s home including the principal, interest, down payment, and fees?
$382,351.08
$556,484.08
$384,629.00
$346,767.20

Answer 47

@jim_thompson5910

Answer 48

@jim_thompson5910

Answer 49

let me think, but mathmate go ahead and post what you get

Answer 50

@gabylovesu
Sorry, it's getting late for me tonight. If the calculator does not do your problem, you can tag me or @jim_thompson5910 tomorrow. But I think if the calculator worked for the first problem, it should be good for similar problems.

Answer 51

still thinking but I may have the answer, one sec

Answer 52

???

Answer 53

I'm stuck on the stamp parts. Do you have any formulas for those? I'm trying to determine if the stamp taxes are based on the mortgage amount or the value of the home.

Answer 54

Like the documentary stamp act

Answer 55

???

Answer 56

yeah for the deed and the mortgage

Answer 57

do you see those formulas anywhere in your notes?

Answer 58

well they are not really formulas but steps

Answer 59

can I have a look? through a screenshot maybe?

Answer 60

This is an example of how they used it The buyer typically pays the documentary stamp tax on the mortgage. In Florida, a buyer will pay $0.35 for every $100 (or portion thereof) of borrowed money. To determine the tax on the mortgage, round the amount borrowed up to the next $100. Then multiply that amount by 0.35 divided by 100, or 0.0035.

Answer 61

ok I'll try that

Answer 62

I'm off by about $35 and I'm not sure why

Answer 63

this is what I'm getting


Downpayment = 0.18*212400 = 38232
Mortgage Amount = 212400 - 38232 = 174168


Total amount paid back (principal + interest) = 1106.25*25*12 = 331875


Discount points = 2*0.01*174168 = 3483.36

Origination Fee = 0.005*174168 = 870.84



Documentary stamp tax on deed (based on home value)
212,400*0.70/100 = 1486.80


Documentary stamp tax on mortgage (based on mortgage value)
174168 rounds to 174200
174200*0.35/100 = 609.7


Mortgage broker fee = 185 + 0.03*174168 = 5410.04

Intangible Tax = 0.002*174168 = 348.336 = 348.34




Add up the results:
38232+331875+3483.36+870.84+1486.80+609.7+5410.04+348.34 = 382,316.08

Answer 64

ok

Answer 65

is there anything in your notes about "Documentary stamp tax on deed" ?

Answer 66

you provided the "documentary stamp tax on the mortgage" portion and that was helpful

Answer 67

Yeah I do @jim_thompson5910

Answer 68

The seller typically pays the documentary stamp tax on the deed. As one example, in almost every county in Florida, the seller is charged $0.70 for every $100 (or portion thereof) on the sale price of the house. To determine the tax on the deed, round the selling price up to the next $100. Then multiply that amount by 0.70 divided by 100, or 0.007. Regardless of whether a buyer pays cash for a house or uses financing, the seller is still responsible for the documentary stamp tax on the selling price.

Answer 69

ok let me try something

Answer 70

yeah I'm still getting 382,316.08

so I'm guessing the answer should be 382,351.08

there's either a rounding error somewhere or I'm missing some fee(s) ?

Answer 71

yeah

Answer 72

honestly i don't know why they make it so complicated with all these taxes and fees. It's kinda ridiculous

Answer 73

No they do not know how to make proper questions

Answer 74

Colin and Payton bought 79 shares of Stock A at $63 per share, 43 shares of Stock B at $119 per share, and a ten-year $7,500 bond with a 14.91% coupon for $7,000. Colin and Payton sold all stocks and bonds yesterday. Stock A was $78 per share and Stock B had a value of $131 per share. If neither stock paid a dividend, which investment has the highest rate of return?

Stock A
Stock B
Bond
Stock A and Bond

Answer 75

For this question I It would be Stock A

Answer 76

Stock A
total cost = 79*63 = 4977
total revenue = 79*78 = 6162
Rate of return = (revenue - cost)/cost = (6162-4977)/4977 = 0.238095


Stock B
total cost = 43*119 = 5117
total revenue = 43*131 = 5633
Rate of return = (revenue - cost)/cost = (5633-5117)/5117 = 0.100840


Bond
total cost = 7000
total revenue = 7,000+0.1491*7500*10 = 18,182.5
Rate of return = (revenue - cost)/cost = (18182.5-7000)/7000 = 1.5975

Answer 77

So it looks like the bond has the highest rate of return

Answer 78

Piper invested $7,400 in a Certificate of Deposit, $4,980 in a corporate bond, $5,100 in a common stock, and $6,350 in a preferred stock, The COD has a rate of return of 3.4%; the corporate bond is 5.8%; the common stock’s rate of return is –1.9%; and the preferred stock has a rate of return of 4.6%. What is Piper’s weighted mean rate of return?

4.60%
3.90%
2.98%
3.09% @jim_thompson5910

Answer 79

@jim_thompson @gabylovesu
For Riley's problem, I get exactly $382316.08 as well, including all charges.
Could Gaby check on two things:
1. typo's on the question,just in case
2. According to the notes, the seller is responsible for the doc.stamp tax on deed (perhaps only in Florida), so Riley should not have to pay the $1486.80.

Answer 80

For Collin & Payton, \(at~maturity\) the bond will only pay 7500*1.1491=8618.25.
So return = (8618.25-7000)/7000=23.11%
It was not stated whether the bond was sold at maturity value.
Even so, stock A (23.8%) still gets the highest return.

Answer 81

Piper,
For each investment, multiply the value of each investment by the rate of return to get the return amount in dollars. Calculate the total value of the investments and the total of the returns.
Weighted mean rate = Total return / total investment

Answer 82

@gabylovesu
If you are interested in calculating Nevaeh's problem (the first one) using formulas instead of calculator, please let me know.

Answer 83

@mathmate for the bond one, don't you have to include coupon payments as well?

Answer 84

@jim_thompson5910
lol, I think it's a different interpretation between us.
For
"and a ten-year $7,500 bond with a 14.91% coupon for $7,000."
I interpreted it as "a $7500 bond for $7000. The bond carries a 14.91% coupon".

Answer 85

I'm not sure anymore, but I thought the bond would provide coupon payments for 10 years

Answer 86

Neither am I. However, there is such a thing as a "zero coupon bond", although the question doesn't specify. In any case, the coupons would pay back the nominal value, which comes to be the same total amount. The thing is, the date of disposition (maturity) is not flexible. The question seems to give the idea the bond was sold at the same time as the shares.