Question: Calculate the following using the data below and show your working. Amount Borrowed: $745,826.00 Initial Interest Rate: 5.84% 1. Initial fortnightly payment of a 25-year

Calculate the following using the data below and show your working.

Amount Borrowed: $745,826.00

Initial Interest Rate: 5.84%

1. Initial fortnightly payment of a 25-year mortgage using the PVA formula.

2. Fortnightly payment in Year 6 - 10 if the interest rate is increased by 2.35% after 5 years using the PVA formula.

3. Fortnightly payment from Year 11 - 15 if the interest rate is further increased by 0.8% after 10 years using the PVA formula.

4. Fortnightly payment from Year 16 – 25 if the interest rate is further increased by 1.6% after 15 years using the PVA formula.

5. Effective annual interest rate for each period: Year 1-5, Year 6-10, Year 11- 15, and Year 16-25 using the EAR formula.

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SOLUTION To calculate the fortnightly mortgage payments using the Present Value of an Annuity PVA formula well need the following information Amount Borrowed 74582600 Initial Interest Rate 584 Number ... View full answer

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