A borrower is faced with choosing between two loans. Loan A is available for $75,000 at 6 percent interest for 30 years, with 6 points to be included in closing costs. Loan B would be made for the same amount, but for 7 percent interest for 30 years, with 2 points to be included in the closing costs. Both loans will be fully amortizing.


a. If the loan is repaid after 20 years, which loan would be the better choice?

b. If the loan is repaid after 5 years, which loan would be the better choice?

Answers

Answer 1

Answer:

a) loan A is a better choice

b) loan B is a better choice

Explanation:

the monthly payment of loan A = $449.66

present value of loan A = ($75,000 x 6%) + $75,000 = $79,500

the monthly payment of loan B = $498.98

present value of loan B = ($75,000 x 2%) + $75,000 = $76,500

the difference between monthly payments = $498.98 - $449.66 = $49.32

if we calculate the present value of 20 years paying $49.32 more it is:

PV = $49.32 x 139.58077 (PV annuity factor, 0.5%, 240 periods) = $6,884 which is higher than the difference

if we calculate the present value of 5 years paying $49.32 more it is:

PV = $49.32 x 51.72556 (PV annuity factor, 0.5%, 60 periods) = $2,551 which is lower than the difference


Related Questions

Suppose the price of apples doubles to $3.00 between year 1 and year 2 but that nothing else in the economy changes Instructions: Round your answers to one decimal placea. What would be the percentage change in nominal GDP? b. What would be the percentage change in real GDP?Suppose the prices of both apples and bread double between year 1 and year 2 and quantities remain unchanged. Instructions: Round your answers to one decimal place a) What would be the percentage change in nominal GDP?% b) What would be the percentage change in real GDP?

Answers

Answer:

1. Suppose Quantity of Apple sold in year one & two =  100Kg.

Price in year 1 = $1.50 per kg

Price in year 2 = $3.00 per kg

Nominal GDP 1 = Price * Quantity = 1.50*100 = $150

Nominal GDP year 2 = 3*100 = $300

Change in Nominal GDP = $150

Percentage change in Nominal GDP = 100%

b. Real GDP of year 1 = Nominal GDP of year 1 = $150

Real GDP of year 2 = 1.50*100 = $150

Change in Real GDP = 0%

2. Quantity of Bread = 100 units price = $ 1 per unit, year 2 price = $ 2 per units

a. Nominal GDP year 1 = 1*100+1.5*100 = $250

Nominal GDP year 2 = 2*100+3*100 = $500

Percentage change in Nominal GDP = 500-250/500 * 100 = 100%

b. Real GDP year 1 = $250

Real GDP year 2 = 1*100 + 1.5*100 = $250

Percentage change in Real GDP = 0%

The percentage change in nominal GDP is 100% and the Change in Real GDP is 0%.

Percentage change in nominal GDP

1. Price in year 1

Price in year 1= $1.50 per kg

Price in year 2 = $3.00 per kg

Nominal GDP 1 = Price ×Quantity

Nominal GDP 1 = 1.50×100

Nominal GDP 1  = $150

Nominal GDP year 2 = 3×100

Nominal GDP year 2 = $300

Change in Nominal GDP = $150

Percentage change in Nominal GDP = 100%

b. Real GDP of year 1

Real GDP of year 2 = 1.50×100

Real GDP of year 2 = $150

Change in Real GDP = 0%

2a. Nominal GDP year 1

Nominal GDP year 1 = 1×100+1.5×100

Nominal GDP year 1  = $250

Nominal GDP year 2 = 2×100+3×100

Nominal GDP year 2= $500

Percentage change in Nominal GDP = 500-250/500 ×100

Percentage change in Nominal GDP = 100%

b. Real GDP year 1

Real GDP year 2 = 1×100 + 1.5×100

Real GDP year 2= $250

Percentage change in Real GDP = 0%

Inconclusion the percentage change in nominal GDP is 100%.

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A freelancer’s pay may vary from year to year.

True
False

Answers

Answer:

True, it can be the same

which part of our body is affected by plogue pose?​

Answers

Answer:

spine and shoulders are affected

The spine and the shoulders of our body part are mostly affectd by the plogue pose. It stretches our body muscles.

Plow Pose

It is a stretching exercise which keeps your body fit and flexible.

Doing stretching exercise regularly benefits the body mucles and tendons.

The plow pose is a stretching exercise where one positions his/her body upside down and keeps their feet bend over the head.

This pose affects our spine and also our shoulders.

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What is forms of buisness??

Answers

Answer and Explanation:

Some forms of business are sole proprietorship, partnership, corporation, and s corporation.

the year the volleyball was introduced​

Answers

Answer:

The Year was 1895

Hope that helps!

Suppose a closed economy. Suppose there are a farmer, a baker and the consumers residing in this economy. Flour and bread are the only things produced. The farmer produces flour that is worth $100,000. The baker buys $80,000 worth of flour to make bread and the consumers buy $20,000 worth of flour directly from the farmer. The baker bakes bread that is worth $120,000 and sells those to the consumers. The farmer hires consumers and pays $15,000 in wages; the baker pays $10,000 in wages. The government collects $5,000 of tax from the farmer, $6,000 from the baker and $3,000 from the consumers. The government also spends $14,000 to hire consumers to operate the government.

Required:

a. How much is the total spending on all final goods and services produced?

Answers

Answer:

The total spending on all final goods and services produced is equal to $154,000.

Explanation:

The total spending on all final goods and services produced can be calculated as follows:

Total spending = Amount paid by consumers to farmer for flour + Amount paid by consumers to baker for bread + Government spending on hiring consumers ...................... (1)

Where;

Amount paid by consumers to farmer for flour = $20,000

Amount paid by consumers to baker for bread = $120,000

Government spending on hiring consumers = $14,000

Substituting the values into equation (1), we have:

Total spending = $20,000 + $120,000 + $14,000 = $154,000

Therefore, the total spending on all final goods and services produced is equal to $154,000.

What type of firm helps consumers and businesses build
portfolios for their financial future?
PLEASE HELP ILL GIVE BRAINLYEST

Answers

Answer: the answer is investment

Explanation: i just did the quiz

Investing firms help consumers and businesses build portfolios for their financial future. Investment banks' responsibilities include underwriting new stock issues, building portfolios, and acting as financial advisors.

What is the Importance of investment firms?

Investment banks benefit the broader financial markets and the economy by connecting buyers and sellers, hence increasing market liquidity. Banks' actions also improve the efficiency of financial development and support corporate expansion, which benefits the economy.

An investment bank's principal purpose is to assist businesses and governments on how to address financial issues. Investment banks provide financing, research, trading and sales, wealth management, asset management, IPOs, mergers, securitized products, hedging, and other services to their clients.

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How do you earn money from investing in bonds?

Answers

Answer:

hold those bonds until their maturity date and collect interest payments on them or sell them at a price that's higher than what you payed initially

Explanation:

During the 1990s, consumers started to drink bottled water instead of soft drinks. The Coca-Cola Company and PepsiCo decided to change their product lineup to include water products, indicating on the part of both companies.

Answers

Answer:

Strategic Flexibility

Explanation:

The strategy of developing a bottle water product line up shows strategic flexibility by Coca-Colca and PepsiCo.

It shows that these two beverages giants are not static, and instead, they adapt to market and cultural trends. When the market trend showed that people were flocking to bottle water from soft drinks, they decided to compete directly against bottle water producers by developing their own bottle water products.

what is the consumer credit act

Answers

The Consumer Credit Act is protections to apply between agreements between traders and individuals, sole traders, partnerships and unincorporated associations. But not agreements made between traders and bodies.

If a stadium sells 40,000 seats sold at $20, $22.50, and $25 and $28 equally distributed in four sections, how much can be made if the stadium sells out?

Answers

section A = 22,500 seats
section B = 14,900 seats
section C = 7,600 seats

Amount of stadium sells out is $955,000

Given:

Number of stadium sells = 40,000

Four section cost = $20 , $22.5 , $25 , $28

Find:

Amount of stadium sells out

Computation:

Average price = [20 + 22.5 + 25 + 28] / 4

Average price = [20 + 22.5 + 25 + 28] / 4

Average price = 95.5 / 4

Average price = $23.875

Amount of stadium sells out = Number of stadium sells × Average price

Amount of stadium sells out = 40,000 × $23.875

Amount of stadium sells out = $955,000

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Does anyone want to be saved and acceot the lord jesus christ to come into your heart if you do please say these words out loud.
Lord I admit to you that I am a sinner, but i ask you to please forguve me from all of my sins. Lord god I repent and I turn away from them and never go back. Lord gold fill me with you Holy Spirit. Amen
Now from this day on read your bible and pray and talk to the Lord.
If you have done these things write back Remeber Jesus Loves You And I do To

Answers

Answer:

nah im goood

Explanation:

i dont feel like asking him to "forguve me from all of my sins"

very proud of u for sharing the good news and ik our Lord is too! don’t let those ppl discourage u! have a blessed day

Dev is an enterprising youngster who wants to start a business of manufacturing men’s accessories. However, he is facing shortage of funds. Suggest to him various forms in which credit can be availed from banks.
6 Marks

Answers

Answer:

heyyyy!

Explanation:

Answer:

SSS card.............

Describe the population distribution in Guyana​

Answers

Statistics indicate that Guyana is one of the most lightly populated countries in Latin America and the Caribbean. The World Bank estimated that there were four people per square kilometer in Guyana in 1988, far fewer than the average of twenty people per square kilometer for all of Latin America. However, more than 90 percent of Guyana's population lived along the coast, on a strip constituting only 5 percent of the country's total land area. A more useful figure is the population density per square kilometer of agricultural land, which was estimated at forty-six in 1988. In Latin America as a whole, the average population density on agricultural land was fifty-five per square kilometer.

More than 70 percent of Guyana's coastal population is rural, living on plantations or in villages strung along the coastal road. The villages range in size from several hundred to several thousand inhabitants. The layout of the villages is dictated by the drainage and irrigation systems of the plantations, both active and abandoned. The villages are most heavily concentrated along the estuary of the Demerara River and the eastern environs of Georgetown, near the mouth of the Berbice River close to New Amsterdam, and along the extreme east coast near the Courantyne River.

The pattern of population distribution in Guyana is a product of nineteenth-century economic development, which was based on the cultivation of sugarcane. Because the swampy coast was fertile and sugar production was geared to export, the large sugar estates confined their operations to a narrow coastal strip. Most of the villages had ethnically diverse populations, but usually one ethnic group predominated. The urban population was predominantly African, but it would be misleading to suggest that all Afro-Guyanese were urban. Indeed, the majority of the Afro-Guyanese population was rural. A far greater majority of Indo-Guyanese, however, lived outside the cities. The interior of the country was left mainly to the Amerindians. Even the later exploitation of timber, bauxite, and manganese in the interior failed to effect any sizeable migration.

Which of the following parts of a business plan include the cash flow projection and profit and loss projection?

Answers

Executive summary. This is your five-minute elevator pitch. ...
Business description and structure. This is where you explain why you're in business and what you're selling. ...
Market research and strategies. ...
Management and personnel. ...
Financial documents.

Which is NOT an indicator of a country's economic health?
A. GDP
B. standard of living
C. environmental awareness
D. inflation

Answers

Answer:

d

Explanation:

anyone who answers fast will get more brainly point
1. Describe what is meant by wealth?
2. What is wealth and how do you think it relates to budgeting?
3. Identify a wealthy person; a.what makes this person wealthy?
b.How did they earn their wealth?

Answers

Answer:

Wealth measures the value of all the assets of worth owned by a person, community, company, or country.

Once you see what you've got, you might be surprised to learn that it's not as much as you thought.

America's wealthy may have more in common with you than you think. If you think America's wealthy don't know what it's like for the average person, think again. Equipped them to make the most of every opportunity

Most of today's millionaires weren't born into their wealth, research shows. A study by Fidelity Investments found that 88% of millionaires are self-made millionaires

Explanation:

What do you already know about different types of economic systems?

Answers

Explanation:

what do you Larry knok about

which of these do you do first. when planning your career? a. make a list of you job preferences and skills. b. apply for as many jobs as you can. c. have a mock interview with a family member or friend. d. sign for an internship ​

Answers

Answer:

a. make a list of you job preferences and skills.

Who are Zipcar's competitors and how do their promotional and advertising efforts compare? Do competitors vary for each of Zipcar's distinct market segments? What transportation options are there for each of the three segments?

Answers

Answer:

Zipcar's competitors and their promotional and advertising efforts compare is described below in details.

Explanation:

Zipcar's top competitors incorporate Uber, Car2go, Enterprise, FlightCar, GoGet, Curb, Getaround, Hubber, and Lyft. Together they generated more than 32.9 billion out of an expected 35.4 thousand workers. Zipcar’s wealth is estimated top three amongst the top ten competitors. The top ten competitors on an average 1.8 Billion. Zipcar has 555 workers and is placed fourth amongst the top ten competitors.

what is economic and non economic activity in business plz help

Answers

Answer:

economic activity refers to a human activity relatedto production and vonsumpition of goods and services for economic gain.

non economic is an activity performed gladly with the aim of providing services to other without any regard to monetary again

what is the income flow associated with labour?

Answers

Answer:

Explanation:

Factor income is the flow of income that is derived from the factors of production ,the general inputs required to produce goods and services. Factor income on the use of land is called rent, income generated from labor is called wages, and income generated from capital is called profit.

The new boss gave workers better family leave, vacation, and sick leave policies. She is probably:
A. task-oriented.
B. narcissistic.
C. toxic.
D. relationship-oriented.

Answers

Answer:

Relation Oriented? its not A, B, or C...

Explanation:

Answer:

D. Relationship Oriented!

Explanation:

I just took the test!

What is the education level of a majority of the Power, Structural, and Technical Systems workers?
associate's degree or vocational school degree
bachelor's degree or apprenticeship
bachelor's degree or master's degree
master's degree or vocational school degree

Answers

Answer:

B- Bachelor's degree or apprenticeship

Explanation:

Took the test, gl! :)

Answer:

Bachelor degree

Explanation:

list out 15 trainings conducted by FNCCI​

Answers

1 Disciplinary Action & Termination of Employment August 23, 2015 August 23, 2015
2 Human Resource Management in Current Perspective September 22, 2014 September 23, 2014
3 Disciplinary Action & Termination of Employment March 09, 2014 March 09, 2014
4 Misconduct & Disciplinary Action September 22, 2013 September 22, 2013
5 Hiring and Termination Practice in Denmark August 30, 2013 August 30, 2013
6 Information sharing on "Hiring and Termination Practice in Denmark". May 31, 2013 May 31, 2013
7 Designing Human Resource Systems November 04, 2012 November 05, 2012
8 Marketing Skills Training July 19, 2012 July 20, 2012
9 Training on Negotiation Skills December 29, 2011 December 30, 2011
10 Enhancing Supervisory and Leadership Skills - - (sorry that’s all I got) :(

What are self-service BI tools?
Business intelligence tools that do not require any particular BLANK
expertise are called self-service tools.

Answers

Answer:

Technical

Explanation:

100% on test

bro r u kidding me smh

Answers

Answer: THATS SO F-U-C-K-I-N-G STUP.ID!!!!!!!!! HOW HARD IS IT FOR THEM TO GIVE YOU MORE TIME!!!!!!!!!

Explanation:

Answer:

But from the screenshot it seems like you spent alot of time on ur work, and they still give you an F and D?!  That's literally messed up. ur teachers should understand :/

Which of the following factors would make the demand for a good elastic?
The good is a necessity.
The consumer does not have much time to shop for alternatives.
The good has many substitutes.
The good is only produced by one company, a monopoly.

Answers

Answer:

The god has manmyuuuu substitustes

Explanation:

Which change is illustrated by the shift taking place on this graph?

an increase in supply
a decrease in supply
an increase in demand
a decrease in demand

Answers

The change illustrated by the shift of the curve in the graph is a decrease in supply.

What is the supply curve?

The supply curve is curve that shows the relationship between price and quantity supplied. The supply curve is positively sloped. As price increases, quantity supplied increases.

What is a decrease in supply?

When there is a shift to the left, it means there is a decrease in supply. The factors that can lead to a decline in supply are:

decrease in the number of suppliersincrease in the price of inputs

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Answer:

b

Explanation:

a decrease in supply

PLEASE HELP!!!!!! Click this link to view O*NET’s Wages and Employment section for Farmworkers and Laborers, Crop.


According to O*NET, what is the projected growth for this career between 2019–2029?


slower than average

decline

little or no change

average

Answers

Answer:

average

Explanation:

Between 2019 and 2029, this career's anticipated growth is ordinary.  Thus, option (D) is correct.

What is growth?

The term "growth" describes an increase in the size and mass of an organ or a body. Cell division and an increase in intracellular material are the usual mechanisms. Development is the maturing of an organism's physiological and functional systems.

The rate of the projected growth of something based on information presently available: One of the few significant commodity firms with a forecasted growth rate of up to 14% is the company.

Therefore, Thus, option (D) is correct.

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