UGBA02 - Summer 2008 Ismail Ceylan UGBA 103 Discussion...

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Summer 2008 Ismail Ceylan UGBA 103 Discussion Section June 02, 2008 Page 1 of 2 Discussion Section #2 Problem 1: Consider a 30-year mortgage plan with a loan amount of $1,000,000. The quoted rate for the mortgage is 7.625%. Answer the following questions: a- Find the monthly payment amount. b- Find the beginning loan balance, the amount of interest paid, and the amount of principal repaid for the ±rst three months. Find the loan balance at the end of the ±rst three months (after youve made the third payment). What percentage of the house will you own at this time? Assume that the house is still worth $1,000,000. c- If the tax rate is 40%, how much income tax will you save during the ±rst 3 months? d- Find the amount of interest paid and the loan balance right after 48th monthly payment. What percentage of the house will you own at this time? e- If you can only make monthly payments of $3000 what is the maximum loan amount you can get at this rate? Assume the mortgage term is 30 years. f- Suppose that you still want to buy the $1,000,000 house and can only pay $3000. Do you
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This note was uploaded on 02/12/2012 for the course UGBA 101A taught by Professor Mccullough during the Spring '08 term at Berkeley.

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UGBA02 - Summer 2008 Ismail Ceylan UGBA 103 Discussion...

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