4. Consider the following. Two mortgages are available for $700,000.00. Both are paid monthly, compounded quarterly...
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4. Consider the following. Two mortgages are available for $700,000.00. Both are paid monthly, compounded quarterly have terms of 5 years and are amortized over 25 years. One has an interest rate of 4% however prohibits any prepayment, the other has an interest rate of 4.3% and allows for prepayment of 10% of the balance per year. If the borrower expects to make a lump sum payment at the end of each year of $4000.00 which mortgage costs the least interest by the end of the term? (4 points) 4. Consider the following. Two mortgages are available for $700,000.00. Both are paid monthly, compounded quarterly have terms of 5 years and are amortized over 25 years. One has an interest rate of 4% however prohibits any prepayment, the other has an interest rate of 4.3% and allows for prepayment of 10% of the balance per year. If the borrower expects to make a lump sum payment at the end of each year of $4000.00 which mortgage costs the least interest by the end of the term? (4 points)
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The mortgage with the lowest total interest is Mortgage 1 The monthly payment for Mortgage ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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