Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a property costs $100,000. a borrower can obtain a

A property costs $100,000. A borrower can obtain an 80% loan with an 8% interest rate...

80.2K

Verified Solution

Question

Finance

A property costs $100,000. A borrower can obtain an 80% loanwith an 8% interest rate and monthly payments. The loan is to befully amortized over 25 years. Alternatively he could obtain a 90%loan at an 8.5% interest rate with the same loan term. (annualizepercentages)

A. The borrower plans to own the property for the entire loanterm. What is the incremental cost of borrowing the additionalfunds?

B. How would your answer change if two points were charged onthe 90% loan?

C. How would your answer to (b) change if the borrower plannedto own the property for only five years?

Answer & Explanation Solved by verified expert
4.3 Ratings (632 Votes)
AThe borrower needs to pay additional12741131052359221754 for borrowing additional    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Hormones of the Adrenal Gland Hormone Origin Target Effect Aldosterone Cortisol Androgens Catecholamines (epinephrine and norepinephrine)

Medical Sciences
Q

what are two experimental considerations when running PXRD (powder X-ray diffraction) using a flat disk sample holder?...

Civil Engineering
Q

Q3 An engineer in the maintenance department after presenting a Ghe5000 scheduled activities to management was...

Mechanical Engineering
Q

Which of the following is the function of a lymphocyte transport oxygen release histamine secrete...

Biology
Q

802 Three resistors having values of 4 6 and 10 ohms are connected in parallel...

Physics
Q

12 cells each having the same emf are connected in series and are kept in...

Physics
Q

3 37 Two identical small conducting spheres A and B have charges 1 mC and...

Physics
Q

Inventory records for Marvin Company revealed the following: Date Transaction Number of Units Unit Cost...

Accounting
Q

Management of Mittel Rhein AG of Kln, Germany, would like to reduce the amount of...

Accounting
Q

naterials marked up 50% to recover indirect costs of support staff, support materials, and shared...

Accounting
Q

In addition to risk-free securities, you are currently invested in the Tanglewood Fund, a broad-based...

Finance
Q

Section 3 3.1-DIMAG Ltd, an unquoted trading company, which prepares accounts to 31...

Accounting