Five years ago, Marcus bought a house. He secured a mortgage from his bank for $1,900,000...
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Five years ago, Marcus bought a house. He secured a mortgage from his bank for $1,900,000 . The mortgage had monthly payments for 20 years with an interest rate of 6.0% compounded monthly. However, after five years, it is time to renegotiate the mortgage. Interest rates have fallen to 4.5% compounded monthly, and Marcus still intends to make monthly payments and to pay back the debt over the remaining 15 years. a) How much were Marcus' initial monthly payments? b) What is the outstanding principal on his mortgage? c) How much are Marcus' new monthly payments? Five years ago, Marcus bought a house. He secured a mortgage from his bank for $1,900,000 . The mortgage had monthly payments for 20 years with an interest rate of 6.0% compounded monthly. However, after five years, it is time to renegotiate the mortgage. Interest rates have fallen to 4.5% compounded monthly, and Marcus still intends to make monthly payments and to pay back the debt over the remaining 15 years. a) How much were Marcus' initial monthly payments? b) What is the outstanding principal on his mortgage? c) How much are Marcus' new monthly payments?
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a To calculate the initial monthly payments we need to use the formula for the present value of an a... View the full answer
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
Posted Date:
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