3 Ann got a 10 year Fixed Rate Mortgage for $100,000. The loan has constant annual payments and an annual interest rate

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3 Ann Got A 10 Year Fixed Rate Mortgage For 100 000 The Loan Has Constant Annual Payments And An Annual Interest Rate 1 (65.53 KiB) Viewed 25 times

3 Ann got a 10 year Fixed Rate Mortgage for $100,000. The loan has constant annual payments and an annual interest rate of 5%. The closing cost for the loan is $2,000 (paid at the time of origination, t-0). Suppose Ann prepays the loan in year 4. Write the NPV of Ann's Mortgage (from Ann's perspective) for an annual discount rate "k" in each of the following cases, GE CR (1+k)* CE (1+) CE Note: the answer must take the form NPV(k) = CF. + (1+) Note: only include one cash-flow for each time period (1+* 3a Fully Amortizing 3b Partially Amortizing where the final balance is Bio = $50,000 Bc Interest Only 3d Negatively Amortizing where the payment is PMT = $1,000 3e Negatively Amortizing where the payment is PMT = $0 4 Compute the IRR for each loan above 4a 4b 40 4d 4e 5 Do closing costs raise the IRR more for loans with greater amortization? (Yes or No)