Asked by Michael Morrison on Apr 27, 2024
Verified
The owner of a property listed at $195,000 is considering two offers. Mr. and Mrs. Sharpe are offering $191,000 cash. The Conlins' "full-price" offer consists of $65,000 cash and a mortgage back to the vendor for $130,000 at a rate of 7.5% compounded semi-annually with payments of $1,000 per month for a five-year term. If current five-year rates are 8.5% compounded semi-annually, what is the equivalent cash value of the Conlins' offer? Which offer should be accepted?
Compounded Semi-annually
Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods, applied twice a year.
Equivalent Cash
A term typically used to describe a sum of money that has the same value as another form of financial instrument or asset.
- Assess different mortgage plans to ascertain the most financially advantageous selection.
Verified Answer
SD
Sylvia DooleyApr 30, 2024
Final Answer :
Cash value of Conlin's offer = $190,115.19; Sharpe offer should be accepted
Learning Objectives
- Assess different mortgage plans to ascertain the most financially advantageous selection.
Related questions
Calculate the Final Monthly Payment of a $175,000 20-Year Mortgage ...
A Marketing Innovation Is the Cash-Back Mortgage Wherein the Lender ...
Camille Can Obtain a Residential Mortgage Loan from a Bank ...
Dash Canada Offers Two Long-Distance Telephone Plans ...
Economy Truck Rentals Offers Short-Term Truck Rentals Consisting of an ...