You purchase a studio apartment in Metro town and take a mortgage of $360,000. You will repay the mortgage with monthly payments at the end of the month for 25 years. Find the size of these monthly payments if your mortgage rate is J₂ = 4%. The bank has a policy of rounding up mortgage payments to the next dollar.

Answer the following questions about the mortgage on your apartment.

1. How much interest did you pay in the third year?

2. How much do you still owe after 4 years?

3. Assuming the mortgage rate stays the same for the whole mortgage what is the size of your final payment?

Answer rating: 100% (QA)

To find the monthly payments on the mortgage we use the basic formula for a loan Payment P r 1 1 rn where P is the principal amount borrowed r is the ... View the full answer