A $770,000 townhome in Richmond Hill was purchased with a down payment of 20% of the amount. A 20-year mortgage was taken for the balance. The negotiated fixed interest rate was 3.75% compounded semi-annually for a three-year term with repayments made at the end of every month.

a. What is the size of the monthly payment?

b. What was the principal balance at the end of the three-year term?

c. By how much did the amortization period shorten if the size of the periodic payments were increased by 15% starting from the 37th payment? Assume the same interest rate.

Answer rating: 100% (QA)

a To find the size of the monthly payment we first need to find the amount of the mortgage Down payment 20 of 770000 154000 Mortgage amount 770000 154... View the full answer