1. You plan on purchasing a $650,000 home. You’ll put 20% down and borrow the balance from Santander Bank. You borrow the money on a 30-year loan with an APR of 6.5%. (15 points 4/3/3/3/3)
a. What is your monthly mortgage?
b. Five years later, what is the balance on the loan?
c. In the first five years, how much interest did you pay?
2. XYZ Company borrows $450,000 to purchase a piece of capital equipment. The term of the loan is 20 years at an APR of 6.5%. What is the monthly payment? ( 12 points 3/3/3/3/ each)
After five years, APR falls to 4.75%. How much is the balance due on the loan?
How much of the loan principle has XYZ Company paid off during the first five years?
XYZ realizes the machinery has a longer productive life than originally estimated; what would the loan payment be if it took out a new 20 year loan?