Devry BUSN379 Week 4 Case Latest 2015 November

Good work effort with Week 4 Case Study II.

1. Mortgage Payments(10/10)

a. What are the monthly payments for a 30-year traditional mortgage?
 

b. What are the monthly payments for a 20-year traditional mortgage?
 

2. Amortization(15/15)

a. Prepare an amortization table for the first six months of the traditional 30-year mortgage.

b. How much of the first payment goes toward principal? Hint: just pull this number from your table.

 

3. Smart Loan(25/25)

a. How long would it take for S&S Air to pay off the smart loan assuming 30-year traditional mortgage payments? Hint: The payment for a loan repaid with equal payments is the annuity payment with the loan value as the PV of the annuity.

 

b. Why is this shorter than the time needed to pay off the traditional mortgage?

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c. How much interest would the company save?

 

 

4. Assume S&S Air takes out a bullet loan under the terms described. What are the payments on the loan?(15/15)

 

 

5. What are the payments for the interest-only loan?(15/15)

 

 

6. Which mortgage is the best for the company? Are there any potential risks in this action?(10/10)