Rye years ago, Ms. Holliday received a mortgage loan from Scotiabank for $260,000 at 6.8% compounded semiannually
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Rye years ago, Ms. Holliday received a mortgage loan from Scotiabank for $260,000 at 6.8% compounded semiannually for a five-year term. Monthly payments were based on a 25-year amortization. The bank is agreeable to renewing the loan for another five-year term at 4.8% compounded semiannually. Calculate the principal reduction that will occur in the second five-year term if
a. The payments are recalculated based on the new interest rate and a continuation of the original 25-year amortization.
b. Ms. Holiday continues to make the same payments as she made for the first five years (resulting in a reduction of the amortization period).
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Related Book For
Fundamentals Of Business Mathematics In Canada
ISBN: 9781259370151
3rd Edition
Authors: F. Ernest Jerome, Jackie Shemko
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