If life insurance is pledged as collateral for a loan, how much can be borrowed? face value of the policy cash surrender of the policy an amount equal to the annual premium only 50% of the face value of the policy
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- Suppose that you have the capacity to pay, would you rather borrow a loan that is amortized monthly or one that is amotized quarterly? what are your considerations when availing a loan (qualitative or quantitative) discuss.asssuming that the interest is the only finance charge, how much interest would be paid on 5,000 installment loan to be repaid in 36 moonthly installment 166.10? what is the apr on this loan?A borrower can obtain an 85 percent loan with an 6 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 95 percent loan at an 6.5 percent rate with the same loan term. The borrower plans to own the property for the entire loan term. Required: a. What is the incremental cost of borrowing the additional funds? (Hint: The dollar amount of the loan does not affect the answer.) b. What is the incremental cost of borrowing the additional funds if 2 points were charged on the 95 percent loan? c. What is the incremental cost of borrowing the additional funds if the borrower planned to own the property for only five years?
- In calculating insurance premiums, the actuarially fair insurance premium is the premium that results in a zero NPV for both the insured and the insurer. As such, the present value of the expected loss is the actuarially fair insurance premium. Suppose your company wants to insure a building worth $390 million. The probability of loss is 1.29 percent in one year, and the relevant discount rate is 3.1 percent. a. What is the actuarially fair insurance premium? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. Suppose that you can make modifications to the building that will reduce the probability of a loss to .80 percent. How much would you be willing to pay for these modifications? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) a. Insurance premium b. Maximum costA borrower can obtain an 80 percent loan with an 9 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 95 percent loan at an 9.5 percent rate with the same loan term. The borrower plans to own the property for the entire loan term. Required: a. What is the incremental cost of borrowing the additional funds? (Hint: The dollar amount of the loan does not affect the answer.) b. What is the incremental cost of borrowing the additional funds if 2 points were charged on the 95 percent loan? c. What is the incremental cost of borrowing the additional funds if the borrower planned to own the property for only five years? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the incremental cost of borrowing the additional funds if the borrower planned to own the years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Incremental…You are planning on taking out a mortgage and would ake to determine the cash value for a geven downs payment and set of penndic payments. The cinh vifus ega t Select one a down payment present value of penodic payments b down payment number of payments times payment size Oc present value of penodic payments Od down payment future value of periodic payments
- What is the net single premium value to be paid by a person who will buy a life annuity at the beginning of a period of 10 years, with a 5-year deferral, 100 TL guarantee, arranged for the age of 30? (i = 0.03) please dont use excel.Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?Assume that there is no prepayment. Based on the following loan information on the fully-amortized fixed rate mortgages, What is the APR of Loan C? (choose the closest answer) Financial Calculator 1 ; Financial Calculator 2 ; Loan Amount Maturity Contract interest rate Upfront fees Upfront mortgage insurance fee APR 6.7% O 6.5% O 6.6% O 7.4% Loan C $200,000 30 years 6.25% 3% 1.6%
- What are the Effects of Maturity on Monthly Payments on Fully Amortizing Loans?In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $34,000 and the interest rate is 9.50%, the borrower “pays” 0.0950 × $34,000 = $3,230 immediately, thereby receiving net funds of $30,770 and repaying $34,000 in a year. A. What is the effective interest rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) B. What is the effective annual rate on a 1-year loan with an interest rate quoted on a discount basis of 19.50%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)In addition to the UFMIP (up-front mortgage insurance premium), the owner-occupant borrower who decides to use an FHA mortgage loan will normally pay an additional annual mortgage insurance premium (MIP) that depends on the loan-to-value ratio and the term of the loan. For loans with maturity longer than fifteen years and a loan to value ratio that is greater than 95%, the MIP will be what percentage of the average annual loan balance? Multiple Choice 0.25% 0.50% 1.10% 0.85%