Annuities and Perpetuities

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700-1,000 words- APA references- no plagiarism 

 

 

From these five lenders, find the following mortgage rates: 15 year (if available) and 30 year.

Convert the Annual Percentage Rates into Effective Annual Rates (EAR’s).  

Discuss which rate is actually the lowest rate and highest rate. Why is this the case? 

  • Present the quoted (stated) rate, APR, and EAR rates in a table listing the lender, and length of loan.
  • Why do the different lenders have different rates?
  • Explain how the Truth in Lending Act governs the APR?
  • What are three common mistakes most homebuyers make when looking at quoted mortgage rates?
  • Considering the time value of money, if an investor choses a 30 year mortgage, what does that choice indicate about their expectations of the time value of money?
  • Is the difference in rates going to have a material impact on the cost to the home buyer? Explain your answer.  
    • 11 years ago
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