Newlyweds Eric and Pamela have finally found the house that they have been looking for and are anxious to make an offer. The 3 bedroom house is on the market for $156,100 and will require that the couple complete some repairs such as installing a new roof and replacing the deck in the back of the house. They estimate these repairs at about $15,000. The house is currently assessed at $150,000, however the real estate agent is confident that if they make the repairs, the market value of the house would increase to $175,000.
a. Eric and Pamela have saved $12,000 for the down payment on the house. Based on the purchase price of $156,100, compute the monthly principal and interest payment on a 30 year mortgage at 6.25%.
b. Find the total amount of interest that Eric and Pamela will pay over the 30 years of the mortgage.
c. In order to pay the $15,000 for the necessary repairs to the house, the couple has a choice between two options:
Borrow the $15,000 from the bank at 8% interest, compounded quarterly for 5 years.
Increase the mortgage amount to include the $15,000, bringing the total amount financed to $159,100
Compute the total interest paid over the life of the loan for each of these options.© BrainMass Inc. brainmass.com October 17, 2018, 2:25 am ad1c9bdddf
This solution illustrates how to use time value of money concepts to evaluate different home financing alternatives.
Ethical Issues Surrounding Subprime Loans
Develop a blog aimed at allowing participants to interpret ethical issues surrounding subprime loans. Be sure to address the following in establishing your blog:
• Summarize the concept of subprime loans and the risks they pose to the lender and borrower.
• Critique the role of leadership decision-making in the subprime loan financial crisis.
• Evaluate subprime loans with the notion of social responsibility. Compare and contrast the resulting consequences for these actions.
• What measures have been taken since that time to assure this will not happen again?
Support your blog with at least five (5) scholarly resources. In addition to these specified resources, other appropriate scholarly resources may be included.
Length of blog: 3 entries (approximately 350 words per entry)
Your blog should be located at a web site that can be easily accessed by Faculty (e.g., http://wordpress.com/). It should contain text that is readable, links that work, a display of at least one graphic, and content information that supports the assignment requirements.View Full Posting Details