Homework Set 33 - Financial Markets and Economic Fluctuations | ECON 423, Assignments of Financial Market

Download Homework Set 33 - Financial Markets and Economic Fluctuations | ECON 423 and more Assignments Financial Market in PDF only on Docsity! PRINT Name ______________________________________________________ Pledge _______ Professor Byrns Econ 423: Financial Markets Problem Set 33 Show relevant calculations in an attached Excel spreadsheet. Financing Your First Home You get a mortgage loan for $150,000, with an interest rate of 7.5% on which you’ll be making monthly payments. First find out the monthly payments and how long it’ll take you to pay it off. Then find out the extra payment you’d have to make each month in order to pay off the loan in 15 years (180 periods) instead of 30 years (360 payments). Paying Off a Balloon $200K, 8%APR, 30yrs 1). Monthly Payment 2).Amounts to refinance if 8 year "balloon" Financing Your First Home Congratulations! You have just graduated with your economics degree. Because of all of the wonderful insight you have gained by taking this course, you have landed a job with a starting salary of $60,000. Your next goal: to buy a house. You’ve picked out a nice two-story, brick home complete with white picket fence that costs $250,000. But you have never had credit before, so you needed to save $100,000 for a down payment. 1. With some creative spending, you managed to save $2,500 a month. If your savings account earned an APR of 7%, how long did it take you to save enough to make the down payment? 2. After you make the down payment, you finance the remaining $150,000 with a mortgage. It is a conventional mortgage: 20 years with fixed monthly payments with 8% APR. What will your monthly payment for principal and interest be? 3. How much will you end up paying in interest over the course of the mortgage?