A $28 000 mortgage is amortized by quarterly payments over 20 years. The mortgage is renewable after 3 years and interest is 6% com- pounded semi-annually. (a) What is the size of the quarterly payments? (b) How much interest will be paid during the first year? (c) What is the balance at the end of the 3-year term? (d) If
A $28 000 mortgage is amortized by quarterly payments over 20 years. The mortgage is renewable after 3 years and interest is 6% com- pounded semi-annually.
(a) What is the size of the quarterly payments?
(b) How much interest will be paid during the first year?
(c) What is the balance at the end of the 3-year term?
(d) If the mortgage is renewed for another three years at 7% compounded annually, what will be the size of the quarterly payments for the renewal period?
(a) What is the size of the quarterly payments?
(b) How much interest will be paid during the first year?
(c) What is the balance at the end of the 3-year term?
(d) If the mortgage is renewed for another three years at 7% compounded annually, what will be the size of the quarterly payments for the renewal period?
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Answer
(a)        PV nc = 28 000.00; i = 3%; n = 80; c = 2/4 = 1/2 p = 11.03 1/2 − 1 = 1.014889 â…View the full answer
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Contemporary Business Mathematics with Canadian Applications
10th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, K. Suzanne Coombs
ISBN: 978-0133052312