I need the correct answer with the calculation (wherever required). 1. Suppose y
ID: 2795120 • Letter: I
Question
I need the correct answer with the calculation (wherever required).
1. Suppose you have a $1 million, 5% fixed rate mortgage with annual payments and a maturity of 30 years. What is your approximate annual payment?I
$60,051
$65,051
$70,051
$75,051
none of the above
2 . Suppose you have a $1 million, 5% fixed rate mortgage with annual payments, a maturity of 30 years and a balloon payment of $750,000. What is your approximate annual payment?
$50,763
$51,763
$52,763
$53,763
none of the above
3. Suppose your annual income is $50,000 and your lender will allow you to have a mortgage payment that combined with other debt payments and property taxes, which in your case amount to $500 per month, is no more than 33% of your monthly income. If the current 30-year mortgage rate is 5%, approximately how large a mortgage can you qualify for (assuming you have the required cash for the necessary down payment)?
$160,000
$161,000
$162,000
$163,000
none of the above
4. Which of the following borrowers would be considered subprime. One with a FICO score of
650
675
700
750
none of above
5. Which of the following purchase mortgages?
I. FNMA
II. FHLMC
III. GNMA
I and II only
I and III only
II and III only
all of the above
none of the above
$60,051
$65,051
$70,051
$75,051
none of the above
Explanation / Answer
1.
What is your approximate annual payment
=1000000/((1-(1+5%)^(-30))/5%)
=65051
the above is the answer
we do only one question based on Chegg rule.
2.
What is your approximate annual payment
=(1000000-(750000/(1+5%)^30))/((1-(1+5%)^(-30))/5%)
=53763
the above is correct answer
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