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Assume you buy a house for $570,000 and have $114,000 as a down payment. Your mortgage rate is 3 percent APR compounded
Posted: Mon Jul 11, 2022 12:08 pm
by answerhappygod
- Assume You Buy A House For 570 000 And Have 114 000 As A Down Payment Your Mortgage Rate Is 3 Percent Apr Compounded 1 (29.55 KiB) Viewed 42 times
Assume you buy a house for $570,000 and have $114,000 as a down payment. Your mortgage rate is 3 percent APR compounded semi-annually and you amortize the mortgage over 25 years with monthly payments. You will assume that you could have earned 5 percent EAR on the down payment (opportunity cost), your marginal income tax rate is 40 percent, real estate fees are 4 percent +HST, and property taxes will be $5,700 annually for this calculation. Ignore maintenance costs. a. What is the true return on your investment if you sell it in 6 years for $905,000? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.) Return on Investment % b. What is an approximate annualized rate of return on your investment? (Do not round your intermediate calculations. Round your answer to 3 decimal places. Omit the "%" sign in your response.) Annualized Rate of Return %