You and your spouse are planning to purchase your first home. The house you wish to buy has a price of $495,000. After covering the closing costs, you will have sufficient cash to make a $52,000 down payment.

-Assuming an interest rate of 5.5% and a 25-year mortgage, compute your monthly principal and interest payment on the mortgage. [2]

- Prepare the amortization table for your 25-year mortgage. [5]

- If you decide to make bi-weekly payments (a total of 26 payments per year) and each payment is half the monthly payment, when will you pay off your mortgage? [3]

- Prepare the amortization table assuming 26 payments per year. [5]

Answer rating: 100% (QA)

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