For Problems 15 – 20 select FOUR of these problems.  Write “SKIP” for only one of these 5 problems.   P5A 5. A borrower can obtain a $160,000 loan with a 6 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years.  Alternatively, he could obtain a $180,000 loan at a 5.75 percent rate for 30 years if she agrees to pay 5 points at closing. What is the incremental cost of borrowing the additional funds (Please show what you enter into the cash flow buttons, if you use them)? 

For Essay Questions  7-14: Select Five of these 8 questions.  IF you do not want to answer, you should write “SKIP” and move to the next question Question A3 Why do lenders charge origination fees, especially loan discount fees?

25. Work this problem   An investor has $60,000 to invest in a $280,000 property. He can obtain either a $220,000 loan at 9% for 20 years, with 3 points charged at closing, or a $180,000 loan for 8.875% 20 years AND a second mortgage for $40,000 at 13.5% for 10 years.  All loans require a monthly payment and are fully amortizing. A.  What is the best alternative if the property is held to maturity (Justify your answer– which offers the cheapest cost to the borrower?)? B. What is the best alternative if the property is held for 7 years (justify your answer)?

For Problems 15 – 20 select FOUR of these problems.  Write “SKIP” for only one of these 5 problems.   P2A The Dallas Development Corporation is considering the purchase of an apartment project for $100,000.  They estimate that they will receive $15,750 at the end of each year for the next 10 years.  At the end of the 10th year, the apartment project will be worth nothing. A.  If Dallas purchases the project, what will be its internal rate of return, compounded annually?  B. If the company insists on an 8.125 percent return compounded annually on its investment, is this a good investment (Justify your answer)?

For Essay Questions  7-14:  Select Five of these 8 questions.  IF you do not want to answer, you should write “SKIP” and move to the next question. Question A2                Explain the difference between a buyer assuming the mortgage and taking title “subject to” the mortgage.

Determine the transition matrix for the Markov Chain Xn. Type here or write out you work to solve the problem on scratch paper to be scanned and uploaded at the end of the exam time.Please include your Full Name, PSU ID, and Problem Number on each sheet of paper.

If 100 people were all singing the same melody at the same time, with no harmony, the texture would be:

In any meter, the greatest emphasis is placed where?

‘High-pitched’ means the same thing as ‘loud volume’.

A “pleasant” combination of pitches is called: