BU.234.610 Real Estate and Infrastructure Finance Final Exam

发布时间：2023-10-24

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BU.234.610 Real Estate and Infrastructure Finance

Final Exam (take-home portion: 30 points)

1. Please re-construct the amortization tables of the first and the fifth ARMs discussed in class (a total of 2 ARMS). In addition, please extend the period from 37 month (we used this period as an example in the class) to 50 months for both ARMs. Please also calculate the IRR and MIRR (FMRR) of each ARM using the 50-month period (10 points). Please note that your answer should be based on the 50-month period, not the 49-month period.

2. Please re-construct the amortization table of the graduated payment mortgage

($100,000 at 12 percent for 30 years, graduation in payments through the first 5 years) discussed in class using different annual growth rate, annual interest rate and graduation period. For this assignment, the annual payment growth rate is 7% per year, the annual interest rate is 18%, and the graduation in payments is for the first 8 years. (This means that the payments from month 97 to month 360 are a constant.) Please report the amortization table of the 360 months, the process you take to calculate the payment for the first month, and a figure plotting the loan balance of the mortgage during the period (10 points).

3. As an owner of a house with 100% equity (no debt), you try to borrow a reverse

annuity mortgage, which will provide you with a periodic income stream during your retirement years. Your objectives are:

1. Maximum Loan Amount Borrowed = $100,000.

2. Loan Period = 18 years.

3. Annual payments will be received at the beginning of each year.

4. The amount of payment should increase at a constant rate of 2% per year for the first 11 years. (This means that the payments from year 12 to year 18 are a constant.)

5. Interest Rate = 24% per year.

Please report the amortization table of the 18 years. You will have to show me all the steps you used to calculate the first-year payment (10 points).

Due date: Due date: Oct 23, 2023. Please bring the hard copy of your answers (in a well- organized document) to the class and hand in before the class starts. There will be 25% penalty for each day's delay.