- Budgeting
- Cash Management
- Consumer and Mortgage Loans
- Debt and Debt Reduction
- Time Value of Money 1: Present and Future Value
- Time Value of Money 2: Inflation, Real Returns, Annuities, and Amortized Loans
- Insurance 1: Basics
- Insurance 2: Life Insurance
- Insurance 3: Health, Long-term Care, and Disability Insurance
- Insurance 4: Auto, Homeowners, and Liability Insurance
- The Home Decision
- The Auto Decision
- Family 1: Money and Marriage
- Family 2: Teaching Children Financial Responsibility
- Family 3: Financing Children’s Education and Missions
- Investments A: Key Lessons of Investing
- Investments B: Key Lessons of Investing
Case Study #4
Data
Your broker has said that for one more “buy down” point (a total of two points with the same $1,500 fees), he can give you loan C with an interest rate of 5.50 percent.
Calculations
Calculate the EIR for Loan C. How much did that extra point save you in terms of your effective interest rate over Loan A and Loan B?
Application
Assuming the same 12 year prepayment plan, which loan should you take?
