MATH 4- HOMEWORK

GOBC Real Estate • Mortgage Notes

• Accelerated Bi-Weekly (Acc bi wk)
• PIPI Questions

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 MATH CLASS 4- HOMEWORK

Homework MATH 4:
1. Accelerated Bi-Weekly questions page 62
2. PIPI questions pages 63 - 64
3. Watch the videos for the next class (Math class 5)

Accelerated Biweekly Questions______________________________________________________________

18. A mortgage loan has a face value of $350,000, an interest rate of J2 = 5.5%, an amortization period of 20 years,
a term of 3 years, and an option to make accelerated biweekly payments. What is the amount of the accelerated
bi-weekly payment rounded up to the next highest dollar?

(1) $1,325
(2) $2,533
(3) $1,198
(4) $2,649

19. A mortgage loan has a face value of $315,000, an interest rate of J2 = 4%, an amortization period of 20 years, a
term of 5 years, and an option to make accelerated biweekly payments. What is the amount of the accelerated bi-
weekly payment rounded up to the next highest dollar?

(1) $952
(2) $1,579
(3) $889
(4) $1,698

20. A mortgage loan has a face value of $400,000, an interest rate of J2 = 3%, an amortization period of 20 years, a
term of 5 years, and an option to make accelerated biweekly payments, rounded up to the next higher dollar. If this
option is exercised, what is the amount of the accelerated biweekly payment?

(1) $2,215.00
(2) $1,108.00
(3) $1,908.00
(4) $3,815.00

Answers: 18(3), 19 (1), 20(2)

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 MATH CLASS 4- HOMEWORK
COST OF FUNDS ADVANCED / YIELD TO THE LENDER: _PIPI_Questions_____________

21. A mortgage contract with a face value of $175,000 requires monthly payments of $1,103.21 over a 20-year
amortization period. However, the mortgage broker advances only $171,000 after deducting a commission of
$2,500, legal fees of $1,000, and an appraisal fee of $500. Calculate the cost of funds advanced for the borrower,
expressed as an effective annual rate (J1).
(1) 4.730370%
(2) 4.777233%
(3) 3.972254%
(4) 4.834288%

22. A mortgage contract with a face value of $170,000 requires monthly payments of $1,117.12 over a 20-year
period. However, the mortgage broker advances only $166,000 after deducting a commission of $2,500, legal fees
of $1,000, and an appraisal fee of $500. Calculate the cost of funds advanced for the borrower, expressed as an
effective annual rate (J1).
(1) 6.078157%
(2) 5.234236%
(3) 5.291647%
(4) 5.361651%

23. A local mortgage broker has arranged a mortgage in the amount of $240,000. The borrower has agreed to pay a
brokerage fee of $8,999.82 which is to be added to the loan amount, giving a face value of $248,999.82 for the loan.
The mortgage bears interest at a contract rate of 18% per annum, compounded quarterly. The mortgage has a term
and amortization period of 25 years. The loan is to be repaid using monthly payments. The equivalent periodic
interest rate, expressed as a rate per month on the funds advanced is:

(1) 1.53649446786%
(2) 1.42140087486%
(3) 1.50410643789%
(4) 1.67322516185%

24. A mortgage is arranged on the following terms:

Funds Advanced $170,000
Mortgage Value $163,500
Nominal Rate J2 = 6.5%
Amortization Period 20 years
Term 20 years
Payments monthly, rounded to the next higher dollar

Calculate the rate of interest paid on funds advanced, expressed as an effective annual rate.

(1) 7.904213%
(2) 7.135321%
(3) 8.196945%
(4) 6.952145%

©2022 GOBC Training Ltd Answers: 21(4), 22(4), 23(1), 24(2) 63

 MATH CLASS 4- HOMEWORK
25. A purchaser has just agreed to a below-market vendor-supplied mortgage with a developer. The $384,000
mortgage is set at an interest rate of J2 = 1.95%, with monthly payments over a 30-year amortization and a 3-year
term. If the developer sells the 3-year term loan immediately to a mortgage investor for $350,000, what is the
mortgage investor’s yield, expressed as an effective annual rate (J1)?

(1) 5.152415%
(2) 5.695532%
(3) 4.958129%
(4) 5.385054%

26. A mortgage broker initiates a mortgage in the amount of $100,000 at J2 = 15%, with an amortization period of
twenty years, a term of five years, and monthly payments. The broker deducts a brokerage fee of $2,500 in addition
to appraisal and legal fees totaling $750.
Calculate the cost of funds advanced to the borrower.
(1) J1 = 16.4047270676%
(2) J1 = 16.361028983%
(3) J1 = 15.5120940566%
(4) J1 = 16.6638916287%

27. A local mortgage broker arranged a mortgage in the amount of $210,000. The borrower has agreed to pay a
brokerage fee in the amount of $7,200 which is to be added to the loan amount, giving a face value of $217,200 for
the loan. The mortgage bears interest at a contract rate of 16 3/4 % per annum, compounded semi-annually. The
mortgage has an amortization period and term of 20 years and calls for monthly payments rounded to the next
higher cent. If the mortgage is to be sold to an investor for $225,000 immediately after the loan is initiated, the
investor will earn the following nominal interest rate, with semi-annual compounding:

(1) 17.4330546481%
(2) 16.0550213423%
(3) 15.5429462485%
(4) 15.4089780467%

28. A local mortgage broker arranged a mortgage in the amount of $210,000. The borrower has agreed to pay a
brokerage fee in the amount of $7,200 which is to be added to the loan amount, giving a face value of $217,200 for
the loan. The mortgage bears interest at a contract rate of 11.5% per annum, compounded monthly. The mortgage
has an amortization period and term of 20 years and calls for monthly payments rounded to the next higher cent. If
the mortgage is to be sold to an investor for $220,500 immediately after the loan is initiated, the investor will earn
the following nominal interest rate, with semi-annual compounding (J2):

(1) 12.7130484631%
(2) 0.938978904%
(3) 11.2677468497%
(4) 11.5355861939%

Answers: 25(4), 26(4), 27(2), 28(4)

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