Homework answers / question archive / Most real-world mortgages feature uniform payments (CFs) and terms from 15 to 30 years

Most real-world mortgages feature uniform payments (CFs) and terms from 15 to 30 years

Finance

Share With

Most real-world mortgages feature uniform payments (CFs) and terms from 15 to 30 years. Solve this real-world mortgage problem: Wells Fargo offers you a 6%, 30 year mortgage. The firm will give you $100K today to help you buy a house that costs $150K. (IE: you will buy the house with $50K of your own funds and $100K of mortgage loan funds). What is your annual mortgage payment (CF or C)? Hint: use formula 74e): v-cf4-4,+)] C = Periodic Payment = CF r=rate per period n = number of periods
Use this info for all the questions in this quiz: A bond is for sale in the secondary marketplace for $990. The bond contract stipulates that the bondholder (from this point on) will be paid $5 in six months, and $1005 in one year Question 1 1 pts Assuming the issuer does not default, which is closest to the native compound interest rate (r) of this bond for someone who purchases the bond today, in semi- annual time periods? 2.0079% 0.8072% 0 1.0076% Question 2 1 pts Using your answer for r above, what is the Yield To Maturity (YTM) of this bond for someone who purchased the bond at today's asking price? Hint: YTM = EAIR