(3) You bought a house using a 20-year mortgage with monthly payments. The initial principal of the
mortgage is $500,000. The interest rate on the mortgage is 5% APR with semiannual compounding.
(a) What is the effective monthly interest rate on the mortgage? (2 points)
(b) What is your monthly payment for the mortgage? (3 points)
() Assume you always pay the required monthly payments on time and there is no prepayment. What is
the outstanding loan balance after 60 monthly payments? (2 points)

Answer rating: 100% (QA)

a The effective monthly interest rate on the mortgage can be calculated using the formula Effective ... View the full answer