Question: The interest rate for the first four years of an $81,000 mortgage loan is 7.5% compounded semiannually. Monthly payments are calculated using a 20-year

The interest rate for the first four years of an $81,000 mortgage

The interest rate for the first four years of an $81,000 mortgage loan is 7.5% compounded semiannually. Monthly payments are calculated using a 20-year amortization. a. What will be the principal balance at the end of the four-year term? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Principal balance b. What will be the monthly payments if the loan is renewed at 4.9% compounded semiannually (and the original amortization period is continued)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment per month %24

Step by Step Solution

★★★★★

3.46 Rating (156 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To solve this problem we need to calculate both the remaining principal balance after 4 years and the new monthly payment for the renewed interest rat... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

The interest rate for the first three years of an $80,000 mortgage loan is 7.4% compounded semiannually. Monthly payments are calculated using a 25-year amortization. a. What will be the principal...

For its first four years of operation, Corporation Y reported the following taxable income. In 2018, Corporation Y generated $900,000 ordinary income and recognized a $20,000 loss on the sale of a...

The interest rate for the first three years of an $87,000 mortgage is 7.4% compounded semiannually. Monthly payments are based on a 20-year amortization. If a $4000 prepayment is made at the end of...

The interest rate for the first four years of an $81,000 mortgage loan is 7.5% compounded semiannually. Monthly payments are calculated using a 20-year amortization. a. What will be the principal...

The interest rate for the first four years of an $92,000 mortgage loan is 8.6% compounded semiannually. Monthly payments are calculated using a 25-year amortization. The interest rate for the first...

The interest rate for the first four years of an $95,000 mortgage loan is 8.9% compounded semiannually. Monthly payments are calculated using a 20-year amortization. a. What will be the principal...

The interest rate for the first five years of a $38,000 mortgage loan was 4.35% compounded semiannually. The monthly payments computed for a 10-year amortization were rounded to the next higher $10....

The interest rate for the first four years of an $98,000 mortgage loan is 9.2% compounded semiannually. Monthly payments are calculated using a 20-year amortization. a. What will be the principal...

The interest rate for the first four years of an $85,000 mortgage loan is 7.9% compounded semiannually. Monthly payments are calculated using a 25-year amortization. a. What will be the principal...

The interest rate for the first four years of a $31,000 mortgage loan was 3.65% compounded semiannually. The monthly payments computed for a 8-year amortization were rounded to the next higher $10....

According to a payroll register summary of Cruz Company, the amount of employees gross pay in December was $850,000, of which $70,000 was not subject to FICA tax and $760,000 was not subject to state...

The Excel file Unemployment Rates provides data on monthly rates for 4 years. Compare 3 and 12 month moving average forecasts using the MAD criterion. Explain why the 3 month model yields better...

Five years after William began his pension plan, the assets within his corporate plan were insufficient to pay benefits to plan participants in his company. The Pension Benefit Guarantee Corporation...

The Gallup poll asked respondents if they had taken a vacation in the last year. The respondents were separated into two groups: those who had graduated from college and those who had not. Numbers in...

The distribution of grade point averages GPAs for medical school applicants in 2017 were approximately Normal, with a mean of 3.56 and a standard deviation of 0.34. Suppose a medical school will only...

A velocity traverse in a 24 cm oil pipe yields the data in the table. What are the discharge, mean velocity, and ratio of maximum to mean velocity? Does the flow appear to be laminar or turbulent? r...

Is the right to life a negative right or a positive right? In other words, when we say someone has the right to life, are we simply saying we have an obligation not to harm that person, or are we...

An n ? n grid is an undirected graph consisting of n rows and n columns of vertices, as shown in Figure 26.11. We denote the vertex in the i th row and the j th column by (I, j). All vertices in a...

A report that will assist police and civilian administrators as well as the campus community by providing statistical information for analysis of crime trends, equipment needs, manpower, issues and...

Hello, I 1.Research the capacity of municipalities in Bosnia and Herzegovina for issuing a bonds? 2.What are pros and cons of bond financing? Compare long-term source of financing between Bosnia and...

B DE Enter your name in this box F G H ANN L M N 5 6 Tutorial 6 - Calculating Loan Payments and Loan Amortization You will determine the loan payment and amortization schedule fee a fixed rate loan...

Hello please answer to the following question. good luck 29. Annuities. You can buy a car that is advertised for $24,000 on the following terms: (a) pay $24,000 and receive a $2,000 rebate from the...

I need chapters 18, 19, 20, and 21 for the workbook for Personal Finance by Madura!! Please help!!! Personal Finance, Fifth Edition by Jeff Madura BUILDING YOUR OWN FINANCIAL PLAN WORKBOOK INDEX...

SOMEONE PLEASE HELP ME GIVE ALL THE ANSWERS!!!!! MY EXAM IS ON 13th MORNING! SO PLEASEEEEE!!!!! 2. An investment is expected to pay the following: C 1 = $2,300, C 2 = $2,600, C 3 = $2,900, and then...

Evaluate the potential gains and losses for forwards,future,call options,put options and swaps. Outline and describe the different risks that each type of derivative contract faces. Describe...