Question Details

[answered] A house price of $100,000 can be financed with two loans be


A house price of $100,000 can be financed with two loans below with monthly payments. The total origination cost associated with these two loans is $3000.

Loan AmountTerm (years)Interest Rate
1st Loan$80,000305%
2nd Loan$10,000307%

Alternatively, the borrower can borrow one loan in the amount of $90,000 with monthly payments and origination cost of $2,000. What should the interest rate be on the loan of $90,000so that the borrower will be indifferent between these two choices?


Answer

 

House price $100000

 

Origination cost $3000

 

Loan 1

 

Loan amount $80000

 

Term 30 years

 

Interest rate 5 % Loan 2

 

Loan amount $10000

 

Term 30 years

 

Interest rate 7 % Alternative

 

Borrow 1 loan...

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 18, 2020

PRICE: $15

Solution~0001003269.zip (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy from our tutoring website www.aceyourhomework.com (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 18, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN YOUR SET DEADLINE.

Order Now