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  3. 1. sam borrows $1,000,000 by a mortgage with annua

1. Sam borrows $1,000,000 by a mortgage with annual payments over 30 years at a rate...

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Finance

1. Sam borrows $1,000,000 by a mortgage with annual paymentsover 30 years at a rate of 9.75% per annum interest. What are hisannual payments? what is the remaining balance on his loan after 5years? 15 years?

Suppose that 10 years after Sam takes out the loan, the mortgageis sold to an investor who requires a 10.5% rate of return oninvestments, how much is the investor willing to pay for theloan?

Answer & Explanation Solved by verified expert
3.7 Ratings (402 Votes)
1 a Annual payment Loan amount Present value of annuity of 1 for 30 years 1000000 9627108 10387336 Working Present value of annuity of 1 for 30 years 11ini Where 11009753000975 i 975    See Answer
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Transcribed Image Text

1. Sam borrows $1,000,000 by a mortgage with annual paymentsover 30 years at a rate of 9.75% per annum interest. What are hisannual payments? what is the remaining balance on his loan after 5years? 15 years?Suppose that 10 years after Sam takes out the loan, the mortgageis sold to an investor who requires a 10.5% rate of return oninvestments, how much is the investor willing to pay for theloan?

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