A mortgage loan in the amount of $100,000 is made at 6 percent interest for 20 years. Payments are to be monthly in each

[answerhappygod]

A mortgage loan in the amount of $100,000 is made at 6 percent
interest for 20 years. Payments are to be monthly in each part of
this problem.

Required:
a. What will monthly payments be if
(1) The loan is fully amortizing?
(2) It is partially amortizing and a balloon payment of $50,000
is scheduled at the end of year 20?
(3) It is a nonamortizing, or “interest-only” loan?
(4) It is a negative amortizing loan and the loan balance will
be $150,000 at the end of year 20?
b. What will the loan balance be at the
end of year 5 under parts a (1) through a (4)?
c. What would be the interest portion of
the payment scheduled for payment at the end of month 61 for each
case (1) through (4) above?
d. Assume that the lender charges 3 points
to close the loans in parts a (1) through a (4). What would be
the APR for each?
e. Assuming that 3 points are paid at
closing and the 20-year loan is prepaid at the end of year 5, what
will be the effective rate of interest for each loan in parts a (1)
through a (4)?
f. Assume the loan is fully amortizing
except that payments will be “interest only” for the first three
years (36 months). If the loan is to fully amortize over the
remaining 17 years, what must the monthly payments be from year 4
through year 20?
g. If this is a negative amortizing loan
and the borrower and lender agree that the loan balance of $150,000
will be payable at the end of year 20:
(1) How much total interest will be paid from all payments? How
much total principal will be paid?
(2) What will be the loan balance at the end of year 3?
(3) If the loan is repaid at the end of year 3, what will be the
effective rate of interest?
(4) If the lender charges 4 points to make this loan, what will
the effective rate of interest be if the loan is repaid at the end
of year 3?