Time Value Of Money Assignment

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Time Value Of Money Assignment

  • Find 5 different online mortgage lenders, such as this one.
  • From these 5 lenders, find the following rates, assuming the mortgage payments are made monthly:
    • 10-year (if available) for fixed-rate mortgage
    • 15-year (if available) for fixed-rate mortgage
    • 30-year for fixed-rate mortgage
  • Convert these rates into effective annual rates (EARs).

Time Value Of Money Assignment

  • Discuss which rate is actually the cheapest rate.
    • What are 2 things about the sample Web site given above that could be applicable to a consumer or investor?
    • Present the rates in a table. List the quoted rate and EAR rate, the lender, and the maturity of the loan. Show your work for each calculation.
    • What is 1 mistake people make when calculating their mortgage payments? Explain your answer.
    • Based solely on the EAR, which rate is the cheapest? Does this make sense?
    • Why do the different lenders have different rates?
    • Is the difference in rates going to make a huge impact on the cost to the homebuyer? Explain your answer.

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