Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.

Get a Professional Answer

Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.

100% Satisfaction Guarantee

Rate the answer you receive.

Ask Annie Kavitha Your Own Question

Annie Kavitha, Teacher

Category: Homework

Satisfied Customers: 1024

Experience: Master of Commerce

4245996

Type Your Homework Question Here...

Annie Kavitha is online now

Consider the following scenario: John buys a house for $135,000

This answer was rated:

★★★★★

Consider the following scenario: John buys a house for $135,000 and takes out a five year adjustable rate mortgage with a beginning rate of 5%. He makes annual payments rather than monthly payments.

Unfortunately for John, interest rates go up by 1% for each of the five years of his loan (Year 1 is 5%, Year 2 is 6%, Year 3 is 7%, Year 4 is 8%, Year 5 is 9%).

Calculate the amount of John's payment over the life of his loan. Compare these findings if he would have taken out a fix rate loan for the same period at 6.5%. Which do you think is the better deal?

Submit your Distinguished Scholar Project to the Dropbox by the end of the Unit.