Ann got a 30 year Fully Amortizing FRM for $1,000,000 at an annual interest rate of 7% compounded monthly, with monthly payments. After 5 years of payments, Ann can refinance the balance into a 25 year Fully Amortizing FRM at an annual interest rate of 6% compounded monthly, with monthly payments. Refinancing will cost Ann 1 point and $1, 500 in closing costs.If Ann refinances into this loan and makes payments for 25 years, what will be her annualized IRR from refinancing?

Answers

Answer 1

Based on the information given what will be her annualized IRR from refinancing is 64.799%.

First step is to calculate the PMT

PMT=PV× rate/[1-(1+rate)^time

PMT=$1,000,000×0.07/12÷[1-(1+0.07/12)^30×12

PMT=$1,000,000×0.07/12÷[1-(1+0.07/12)^360

PMT=$1,000,000×0.005833333÷[1-(1+0.005833333)^360

PMT=$5,833.333÷[1-(1.005833333)^360

PMT=$6,653.02

Second step is to calculate the present value (PV) after 5 years

PV=PMT×[1-(1+rate)^time/rate

PV=$6,653.02×1-(1+0.07/12)^25×12÷0.07/12

PV=$6,653.02×1-(1+0.07/12)^300÷0.07/12

PV=$6,653.02×1-(1+0.005833333)^300÷0.005833333

PV=$6,653.02×1-(1.005833333)^300÷0.005833333

PV=$941,315.20

Third step is to compute PMT for refinancing  when rate is 6%

PMT=PV× rate/[1-(+rate)^time

PMT=$941,315.20×0.06/12÷[1-(1+0.06/12)^360

PMT=$941,315.20×0.005÷[1-(1+0.005)^360

PMT=$4,706.576÷[1-(1.005)^360

PMT=$6,063.72

Third step is to calculate the monthly savings

Monthly savings=$6,653.02-$6,063.72

Monthly savings=$589.30

Fourth step is to calculate the Cost of refinancing

Cost of refinancing=1%×$941,315.20+$1,500

Cost of refinancing=$9,413.152+$1,500

Cost of refinancing=$10,913.152

Fifth step is to calculate the IRR

PMT savings=Cost of refinancing ×IRR÷[1-(1+IRR)^time

$589.30=$10,913.152×IRR÷[1(1+IRR)^300

Monthly IRR=5.3999%

Annualized IRR=5.3999%×12 months

Annualized IRR=64.799%

Inconclusion what will be her annualized IRR from refinancing is 64.799%.

Learn more about annualized IRR here:https://brainly.com/question/24129329


Related Questions

Midyear on July 31st, the Digby Corporation's balance sheet reported: Total Liabilities of $128.297 million Total Common Stock of $6.350 million Cash of $10.050 million Retained Earnings of $45.255 million. What were the Digby Corporation's total assets

Answers

Based on the information given  Digby Corporation's total assets is:$179.902 million .

Using this formula

Total assets = Total liabilities + Shareholders’ equity

Total assets= Total liabilities + ( Total common stock + Retained earnings)

Where:

Total liabilities= $128.297 million

Total common stock= $6.350 million

Retained earnings= $45.255 million

Let plug in the formula

Total assets= $128.297 million  + ( $6.350 million  + $45.255 million)

Total assets= $128.297 million  +$51.605 million

Total assets= $179.902 million  

Inconclusion  Digby Corporation's total assets is:$179.902 million .

Learn more about total assets here:https://brainly.com/question/10700825

compensation Policy issues , include a company's policies concerning all the following except Select one
a Setting the salary and promotion strategy
b . The minimum salary they are legally obliged to pay
c The of paid and unpaid leaves as well as holidays
d Defining the probationary pay versus the final employment pay
e Deciding on the Payment for overtime hours.​

Answers

It should be noted that compensation policy issues refer to all the company's policies given except E. Deciding on the Payment for overtime hours.​

A compensation policy simply means the principle of action that is proposed by a company or organization in regard to the salary, benefits, and bonuses of the employee.

It includes setting the salary and promotion strategy, the minimum salary they are legally obliged to pay, etc. It doesn't have to do with deciding on the payment for overtime hours.​

Learn more about compensation on:

https://brainly.com/question/25301308

dentify the situation below that will result in a favorable variance. Multiple Choice Actual revenue is lower than budgeted revenue. Actual revenue is higher than budgeted revenue. Actual income is lower than expected income. Actual costs are higher than budgeted costs. Actual expenses are higher than budgeted expenses.

Answers

There are different ways firms generate revenues. The option that leads to favorable variance is when Actual revenue is higher than budgeted revenue.

Budget variance is known to be the difference between the budgeted amount of expense or revenue, and the actual amount.

The budget variance is said to becomes favorable when the actual revenue is higher than the budget or when the actual expense is less than the budget.

If revenue of a firm is higher than the budget or the actual expenses are less than the budget, this is known to be a favorable variance.

Learn more about Favorable variance from

https://brainly.com/question/15992453

Rachel borrows money from her bank to buy a car. What type of bank service
is Rachel using?
O A. Credit card
B. Checking account
C. Savings account
D. Loan

Answers

Answer:

D

Explanation:

A loan refers to money borrowed by people or organisations from the bank

The type of bank service which Rachel is using in order to buy a car is 'loan.'

What is a bank?

A bank, an financial institute that deals in money and its substitutes. A bank accepts deposits from the public and then creates a demand deposit while also simultaneously providing loans. Thus, banks are intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money).

What services do banks provide?

Banks provide a lot of services to its customers. These services intends to attract customers. Such services provided by the banks are- giving loans, credit and debit cards, discounting on bills of exchange, cheque payments, digital financial services, and even personal services.

What do you mean by a loan?

A loan is a sum of money that one or more individuals or companies borrow from banks or other financial institutions so that they can manage planned or unplanned events financially.

When a loan is borrowed from a bank or other financial institution it has to be paid back, usually together with an extra amount of money called interest, that you have to pay as a charge for borrowing within a given period of time. Thus, loans provide liquidity to businesses and individuals, and so they are a necessary part of the financial system.

Hence, option D is correct.

To learn more about loan here:

https://brainly.com/question/11794123

#SPJ2

How does the value of the cars produced by the Japanese company within the United States impact the United States' Gross National Product (GNP), and why?

Answers

Answer:

:)

Explanation:

The cars it produces in the U.S. are added to U.S. GDP, but not U.S. GNP, as these cars use domestic factors of production (labor and resources), but are produced by a foreign nation. Conversely, the values are added to Japan's GNP, but not Japan's GDP.

If only one airline serves a town, does a monopoly exist? What about competition from other services?

Answers

If only one airline serves a town, the question of whether a monopoly exists is:

Yes, a monopoly exists

Based on the given question, we are asked to state whether a monopoly exist in a situation where there is only one airline in a town, and the answer is, yes, that is a monopoly

It is important to note that a monopoly has to do with the domination of one company in a market system whereby there is little to no competition from other companies. In this situation, there is usually higher prices of products because there is a lack of competition for competitive prices.

Read more about monopoly here:

https://brainly.com/question/13113415

Which is not a consideration when allocating assets and diversifying? A. Real estate holdings B. Avoiding similar investments C. Rate of return D. Portfolio size​

Answers

When one is considering the allocation of their assets as well as how to diversify them, they don't consider A. Real estate holdings.

Diversification involves:

Investing in non-similar assets. Investing in a wide array of different assets to reduce risk.

When thinking about diversifying your assets, one doe not have to think about the number of real estate holdings they already hold as there are other assets to invest in.

In conclusion, option A is correct.

Find out more about diversification at https://brainly.com/question/14081320.

Answer:D

Explanation:

Just took the test

a. Jamie purchases a washer and dryer from McKinney Appliances. She applies for the instore credit card. The application contains a clause stating that the store will retain a security interest in the goods purchased with the card until the goods have been paid in full. Discuss if this is an enforceable security interest. b. In this scenario, Jamie purchases the washer and dryer from McKinney Appliances and she signs a purchase agreement to pay $1,000 down and $100 per month until the balance, plus interest is fully paid. Is this an enforceable security interest

Answers

a. The contract that Jamie entered into for the purchase a washer and dryer based on an in-store credit card with McKinney Appliances constitutes an enforceable security interest.

The enforceability of the contract stems from the fact that Jamie freely agreed to use the store's credit and the agreement was not a fraud.  With this security interest, McKinney Appliances officially establishes its security interest in the washer and dryer.  It can exercise the claim in the appliance when Jamie fails to honor the agreement.

b. Yes. It is an enforceable contract.  This contract involves the sale of goods with a down payment and credit.

Thus, McKinney Appliances can legally force Jamie to pay on his account, failing which, McKinney Appliances may recover Washer and Dryer.

Learn more: https://brainly.com/question/9636559

Option A is an enforceable security interest while option B is not.

The security interest must be linked to a real sale. This means that it can only be established if it is linked to a sale that brings new values ​​into the buyer's assets.

A security intererest agreement must be entered into in connection with the sale. This means that it must be entered into before the item for sale is handed over to the buyer.

Loans can only be given for what is covered by the sale: This means that you can not get a car loan for additional equipment / upgrades that are bought afterwards and / or by someone other than the seller.

Learn more about security interest in https://brainly.com/question/14997152

3. Aesop is not using traditional advertisements or discount sales to promote its products. Instead, Aesop gets its promotional communication mostly by word-of-mouth for the design of its products, stores, and events, which are a singular mix of indulgent product experiences, thoughtful language, and modern minimalist design. If you had to interact with Natura & Co SA, which customer engagement model--Natura's, The Body Shop's, or Aesop's-- would be the best for you and why?

Answers

Based on the information given, the model that will be appropriate for the company is the client commitment model.

The client commitment model is a model whereby a company provides and meet the needs of the customers. It is important as it assists the brand with comprehension.

Therefore, the interaction with interact with Natura & Co SA, will ensure that they use this model in order to get more customers, improve sales, and get more profit.

Learn more about models on:

https://brainly.com/question/24414910

Lexie, a marketing manager, regularly interviews candidates for her team. Because Lexie is a

people person, and her department is built on teamwork, when she interviews candidates for a

job, she tries to get to know the candidates as people. She always begins by saying, "Tell me

about yourself," and based on what the candidate says, she lets the conversation unfold for 30

to 60 minutes per session.

Questions

i) How does Lexie’s current interview technique limit her effectiveness as an interviewer?


[3 marks]

ii) Lexie also wishes to contact people or organizations as referees for job candidates to fill

strategic positions in the organizations. Discuss two to three limitations of referee reports

placed on management or organizations for job candidates. How do organizations cope

with this burden?


[4 marks]

iii) The human resource department at Lexie’s organization is preparing to formulat

Answers

Lexie's interviews are not as effective because she does not care about the professional training of the people she will hire, which can have serious consequences on the operation of the company. On the other hand, the referral system would also hinder the operation of the company because the skills or abilities of the employees are not verified.

When we do a recruitment process, we must have several aspects in common to hire or dismiss a job applicant. Among the aspects that must be taken into account are:

Work experience.Vocational training.Other experiences.

Following the foregoing, the person in charge of the selection process must objectively select the candidate who best fits a job based on her experience or professional training.

According to the above, Lexie is limiting her liability because she only looks at aspects of the applicants' personal lives without evaluating their ability to perform a job. Additionally, you should carry out some tests on the applicants to verify their work capabilities.

On the other hand, in the referral system, she has several limitations because she accepts the criteria of another individual or organization to hire a person without herself evaluating him to fit the job that she requires.

Learn more about teamwork in: https://brainly.com/question/18869410

How much money should be deposited annually in a bank account for five years if you wish to withdraw ​$3 comma 000 each year for three​ years, beginning five years after the last​ deposit? The interest rate is 4​% per year.

Answers

The amount to be deposited in the bank for five years is $1729.

The first step is to determine the present value of $3000.

Cash flow in year 1 - 4 = 0

Cash flow in year 5 - 7 = $300

I = 4%

PV calculated using a financial calculator = $7,116.48

The second step is to determine the future value of the present value calculated above

$7,116.48 x (1.04)^7 = $9,364.80

The third step is to determine the amount to be deposited each year for 5 years:

Amount = future value /annuity factor

Annuity factor = {[(1+r)^n] - 1} / r

= [(1.04)^5 - 1] / 0.04 = 5.416323

Amount = $9,364.80/ 5.416323 = $1729

A similar question was solved here: https://brainly.com/question/24108530

In which 2 ways can you create a customized template for a project in qbo

Answers

The two ways you can create a customized template for a project in QuickBooks online are as follows:

1. Use an inbuilt project template and then customize it to your style. This method involves the use of a standard or custom template. Then, you can adjust the tasks, due dates, and assignees as required.

2. Create a new project template by customizing it to match your needs.

Thus, the two ways of creating a project template in QuickBooks online as stated above are not complicated.

Learn more about creating a customized template for a project in QuickBooks online here: https://brainly.com/question/21642966

Those little ______ will grow up to be ants someday.

Answers

Larvae ………………………………..

please help!!

Bobby is an electrician who specializes in installing electronic locks. What kind of company might be interested in hiring Bobby?

A.
a national hotel chain

B.
a meat packing facility

C.
a local parks department

D.
a printing company

Answers

Answer:

a . national hotel chain

Explanation:

because electrician who install lock are supposed to work at a hotel for the safety of the people

Answer:

I think it's A ? I'm not 100% sure, but hotels often have electronic locks that you need a key card to open

In their ________ roles, managers interact with people inside their work units; while solving problems is part of their ________ roles. Multiple Choice decisional; technical interpersonal; technical decisional; conceptual interpersonal; decisional

Answers

It should be noted that in their interpersonal roles managers interact with people inside and outside their work units while solving problem is part of their decisional roles.

What is interpersonal role of a manager?

This the role that is been expected by the manager in carrying the work team so they can achieve the organizational goals.

Therefore, managers interact with people inside and outside their work units while solving problem.

Learn more about Interpersonal roles at:

https://brainly.com/question/24858866

Monsters Incorporated (MI) in ready to launch a new product. Depending upon the success of this product, MI will have a value of either $100 million, $150 million, or $191 million, with each outcome being equally likely. The cash flows are unrelated to the state of the economy (i.e. risk from the project is diversifiable) so that the project has a beta of 0 and a cost of capital equal to the risk-free rate, which is currently 5%. Assume that the capital markets are perfect. Assume that in the event of default, 20% of the value of MI's assets will be lost in bankruptcy costs and suppose that MI has zero-coupon debt with a $125 million face value due next year. The initial value of MI's debt is closest to:

Answers

The Initial value of debt is $111.11 million.

Value of unlevered equity = ($100 million+ $150 million + $191 million)/3 / 1.05

Value of unlevered equity = $147 miliion / 1.05

Value of unlevered equity = $140 million.

Since the corporation have has zero-coupon debt with a $125 million face value, this means If the firm has a value of $100 million, all of it is from the debt value,

Initial value of debt = ($100 million + $125 million + $125 million)/3 / 1.05

Initial value of debt = $111.11 million.

The Initial value of equity = Value of unlevered equity - Initial value of debt

The Initial value of equity = $140 million - $111.11 million

The Initial value of equity = $29 million

Hence, the Initial value of debt is $111.11 million.

Read more about Debt:

brainly.com/question/11556132

Jerome is assisting with strategic planning for his organization's information system. He knows that information system organizational strategy is influenced by four main drivers: _____. a. corporate strategy, business unit strategies, innovative thinking, and technology innovations b. technologies, competencies, people, and projects c. strategic planning focus, information system goals, business unit strategy, and typical projects d. decision-making frameworks, focus of resource use, business opportunities, and communication among management and other personnel

Answers

Jerome is assisting with strategic planning for his organization's information system. He knows that information system organizational strategy is influenced by four main drivers: d. decision-making frameworks, focus of resource use, business opportunities, and communication among management and other personnel.

The information system is introduced in companies that want to change their methods of operations, goals, products, and services to meet up to their competitions or supersede them.

To successfully achieve these objectives, the resources, business strategies, decision-making framework, and communication should be strengthened to implement the Information system

Learn more about Information System here:

https://brainly.com/question/25727285


Which part of the LRAS curve looks similar to a " Classical LRAS^ prime prime curve?

A. The Segment between A and B
B. The Segment between B and C
C. The Segment between C and D
D. The Segment between A and C

Answers

Answer:

C. The segment between C and D

Explanation:

mark me brainliest plsss

Help help buissness help help

Answers

Answer:

My best guess will have to be A

Explanation:

most research I did was talking about money stability

Answer:a control of money

provided service to srijana store and received cash Rs 5000.

Answers

Answer:

what we want to tell about ?or your question is not proper type it full and proper .

I can't understand what you want to ask ?

Help help help businesses

Answers

Answer:

A. monopolize access to printing currency

Answer is A - monopolise access to printing currency.

And, the Central bank has two primary goals in what is known as a dual mandate. Those goals are price stability, low inflation (at about 2 percent), and maximum employment.

Help help help help help

Answers

D is the right answer

Who should fill out a Free Application for Federal Student Aid (FAFSA)?
PERDELE
A. Only students who have been accepted to college should fill out a
FAFSA.
B. All students should fill out a FAFSA.
C. Only students who are unable to pay for college should fill out a
FAFSA.
D. Only students who have received good grades should fill out a
FAFSA.
EL
14
FREE

Answers

Based on the eligibility requirements stated, those that should fill out a Free Application for Federal Student Aid (FAFSA) are the "Only students who have been accepted to college should fill out a FAFSA."

Eligibility Criteria for FAFSA

According to the United States government website, to be eligible for the program requires one to have the following criteria:

Be a U A Citizen.Have a valid Social Security Number.Register with Selective Service.Have a high school diploma.Be accepted or already a regular student working toward a degree or just No drug record, etc.

Hence, in this case, it is concluded that the correct answer is option A. "Only students who have been accepted to college should fill out a

Only students who have been accepted to college should fill out aFAFSA."

Learn more about the FAFSA here: https://brainly.com/question/1278363

expalain fiveprinciples of insurance​

Answers

Answer:

insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution.

A(n)______allows students to study more specific topics within their majors.
A. specialization
B. requirement
C. minor
D. integration

Answers

Answer: The answer would be a interrogation

Explanation:

- Assume the company can experience the following return with the following probability
Scenario probability Expected return
A 0.2 +30%
B 0.3 +15%
C 0.1 -10%
D ? -20%


i- Compute the expected return.
ii- Compute the expected value of $2000 investment over a coming year.
iii- Compute the standard deviation of the percentage return over the coming year iv- If the risk-free return is 7 percent, what is the risk premium for a stock market investment

Answers

i. The expected return is 1.5%.

ii. The expected value of $2,000 is $30 ($2,000 x 1.5%).

iii. The standard deviation of the percentage return  = 0.085 ([tex]\sqrt{0.007175}[/tex]) or 8.5%.

iv. If the risk-free return is 7 percent, the risk premium for a stock market investment is 1.5% (8.5% - 7%).

Data and Calculations:

Scenario  Probability  Expected      Expected    Variance   Squared

                                      Return            Value                         Variance

A                     0.2            +30%            0.06         0.045       0.002025

B                     0.3            +15%             0.045       0.03         0.0009

C                     0.1             -10%             -0.01        -0.005       0.000025

D                    0.4             -20%            -0.08        -0.065      0.004225

                                                            0.015                          0.007175    

D's probability = 0.4 (1 - (0.2 + 0.3 + 0.1) or 40%

Expected return = (0.2 x 0.3 + 0.3 x 0.15 + 0.1 x -0.10 + 0.4 x -0.20)

= (0.06 + 0.045 - 0.01 - 0.08)

= 0.015

= 1.5%

Learn more about expected returns and values here: https://brainly.com/question/6354635

what are the different types of patents?

Answers

Answer:

three types:-

utility patentsdesign patentsplant patents

What role do you think Netflix and social media
played in popularizing Marie Kondo? Do you think
the popularity of the show "Tidying up with Marie
Kondo' is based on Marie Kondo only, or would any
other personality achieve similar results?

Answers

Netflix and social media  played an important role in popularizing Marie Kondo.

Yes, Netflix and social media  played an important role in popularizing Marie Kondo because the program of Marie Kondo is viewed by million of people across the world through the Netflix and social media and people are loving it which increase the popularity of Marie Kondo.

In my opinion the popularity of the show "Tidying up with Marie  Kondo' is based on Marie Kondo only because the people know the method through this program and in my knowledge there is no one that achieve the same result so we can conclude that Netflix and social media  played an important role in popularizing Marie Kondo.

Learn more about social media here: https://brainly.com/question/3653791

Learn more: https://brainly.com/question/26063194

Parkinson Company (PC) had a beginning balance of $86,000 and an ending balance of $90,000 in itslong-term marketable securities account. During the period the Company paid $10,000 to purchase marketable securities. If the Company reported a gain on the sale of marketable securities of $1,000 the amount of the cash inflow from the sale of securities is

A. $7,000.
B. $6,000.
C. $5,000.
D. None of the answers is correct.

Answers

B I think sorry if wrong :/

This year Andrews achieved an ROE of 30.2%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Andrews's ROE

Answers

It Is expected that Andrew's ROE would increase.

ROE is a short form of return on equity. ROE is a profitability ratio.  It measures the ability of a firm to generate profits from its asset

Return on equity = net income / average total equity

ROE can be decomposed into:  

ROE = profit margin x asset turnover x financial leverage

ROE = (Net income / Sales) x (Sales/Total Assets) x (total asset / common equity)

If, profit margin increases, ROE would also increase.

To learn more about ROE, please check: https://brainly.com/question/4298617

Other Questions
PLEASE HELP ME I NEED HELP Which element on the periodic table is the lowest mass in period 4?? The block in the figure below has a mass of 5.1 kg and it rests on an incline of angle . You pull on the rope with a force F = 34 N. Assume the incline is smooth and determine the angle of the incline if the block moves with constant speed. plz help math It involves a graph and something I don't understand all I know is that it involves numbers if you answer this just for the points and if it is not a real answer for example (I'm just her for the points) you will be reported. Thank you but plz do help Olivia is making a model plant cell for an exhibit at the science fair at her school. Her plan includes using: 1) mesh screen to model the cell membrane 2) cardboard to model the cell wall 3) a battery to model the mitochondrion 4) a wooden block to model the nucleus Evaluate each of the choices Olivia made. If you agree with the choice, explain why you agree with it. If you disagree with the choice, explain why you disagree with it and indicate what she should use instead. Which of the following correctly calculates themoney supply with M2?A. M2 + M3B. M2-M1C. M2 + M1 A worker earns $30 every 4 hours. How much would the worker earn in 19 hours? f(x) = 4x, g(x) = x^4 find gog Suppose that on any given day the prevailing equilibrium federal funds rate is below the Federal Reserve's federal funds target rate. If the Federal Reserves wishes for the federal funds rate to be permanently at the target level, then the appropriate policy for the Federal Reserve is to take a defensive open market purchase, everything else held constant. True False Help! WILL MARK BRAINLIESTOne major reason for settlement throughout the 1500s and 1600s was the ___________________________ in North America. Why was the Americans quest to capture pancho villa both a success and a failure? A hen costs $4 and chicks are sold at 3 for $2. A farmer paid $100 exactly for 80 of these birds. How many of each type did he buy? I NEED SO BAD another word for a religious group {studies weekly week 14} Answer the following questions. gandang bungad to ah Select the two pairs of figures that are similar if you have 6 apples and you give 2 apples to Ciara how many apples do you have? (hint you don't have friends) Decide if the following sentence is grammatically CORRECT or INCORRECT.Pierre: Est-ce que tu veux venir au cinma avec moi?Alice: Non merci, je ne veux pas en aller. CorrectIncorrect It would be very helpful if someone could find the answer to this: Where did George Lewis Lasage invent the Electric Telegraph When you swing a bat and hit a baseball, the ball flies into the outfield. What happens to the energy you used to swing the bat?.