Purchase Solution

chance the interest rate charged on home loan will exceed 8%

Not what you're looking for?

Ask Custom Question

A recent survey of banks revealed the following distribution for the interest rate being charged on a home loan (based on a 30-year mortgage with a 10% down payment).

Interest Rate 7.0% 7.5% 8.0% 8.5% >8.5%
Probability 0.12 0.23 0.24 0.35 0.06

If a bank is selected at random from the distribution, what is the chance that the interest rate charged on a home loan will exceed 8.0%?
1. 0.06 2. 0.41 3. 0.59 4. 1.00.

Purchase this Solution
Solution Summary

The solution explains how to find the probability that the interest rate charged on home loan will exceed 8%.

Purchase this Solution
Free BrainMass Quizzes
Measures of Central Tendency

Tests knowledge of the three main measures of central tendency, including some simple calculation questions.

Measures of Central Tendency

This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.

Terms and Definitions for Statistics

This quiz covers basic terms and definitions of statistics.

Know Your Statistical Concepts

Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.

View More Free Quizzes
Related BrainMass Solutions

  • A bank deposit paying simple interest at the rate of 5%/year grew to a sum of $3100 in 10 months. Find the principal

    a loan of $30,000 over 10 yr if interest at the rate of 12%/year is charged on the unpaid balance and interest calculations are made at the end of each month?

  • Mortgage with Points: Effective Annual Interest Rate

    What is the effective annual interest rate charged on such a loan assuming loan repayment occurs over 360 months? Assume the interest rate is 1 percent per month. Mortgage with Points.

  • Do you pay back the mortgage or Home Equity loan first?

    Also in case of home equity line of credit, the interest is normally charged on the balance outstanding which means, the actual interest paid by the individual will be less if he repays $ 500 every month.

  • Mortgage Points

    What is the effective annual interest rate charged on such a loan assuming loan repayment occurs over 360 months? Assume the interest rate is 1 percent per month. For this loan, we use 100,000 as the present value to compute the mortgage.

  • Estimating An Affordable Mortgage and Monthly Payment

    Maximum Principal $94,308.18 Down Payment at 15% of Purchase Price $16,642.62 Maximum Purchase Price of Home $110,950.80 Because a lender will loan on the lower of these requirements, the affordable monthly mortgage payment is $616; the affordable

  • Effective annual rates, Value of the preferred stock

    1) Bank A offers to lend me the required funds on a loan in which interest must be paid monthly, and the quoted rate is 8 percent. Bank B will charged 9 percent, with interest due at the end of the year.

  • Geico Problem: Capital Budgeting Decisions

    One point means that the borrower pays 1% of the $50,000 loan back to the lending institution at the inception of the loan. That is, if one point is charged, the repayments are computed as in (a), but the borrower receives only $49,500.

  • Markups and Markdowns

    /loans) = $23,000 Average student loan interest rate (from www.finaid.org/loans) = 8% or 0.08 How much interest is charged at the end of first day of loan?

  • Effective annual interest rates

    Bank B also offers to lend the $10,000, but it will charge 8%, with interest due at the end of the year. What is the difference in the effective annual rates charged by the two banks?

View More Related Solutions