You buy a house for $240000, and take out a 30-year mortgage at 7% interest. For...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You buy a house for $240000, and take out a 30-year mortgage at 7%
interest.
For simplicity, assume that interest compounds continuously.
A) What will be your annual mortgage payment?
per year
B) Suppose that regular raises at your job allow you to increase your
annual payment by 3% each year. For simplicity, assume this is a
nominal rate, and your payment amount increases continuously. How
long will it take to pay off the mortgage?
years
You buy a house for $240000, and take out a 30-year mortgage at 7%
interest.
For simplicity, assume that interest compounds continuously.
A) What will be your annual mortgage payment?
per year
B) Suppose that regular raises at your job allow you to increase your
annual payment by 3% each year. For simplicity, assume this is a
nominal rate, and your payment amount increases continuously. How
long will it take to pay off the mortgage?
years