calculate Time Value of Money, Financial Ratios and Cash Flow You want to buy a...
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calculate Time Value of Money, Financial Ratios and Cash Flow
You want to buy a house for $1,000,000. However, you have to apply for a mortgage from a bank, since you do not have enough cash.
1. If the bank requires a 20% down payment, 12% annual interest, and fixed monthly installments which are at a one-third (1/3) of your monthly income, then how many times monthly installments do you have to pay, if you earn $60,000 in a month?
2. Suppose that you will receive an inheritance in the next 2 years and wish to completely pay off the mortgage for whatever outstanding debt amount at that time. How much is that lump sum amount that you pay?
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