You want to purchase a home for $747,000 in South Calgary. Your mortgage officer at BMO...

 

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You want to purchase a home for $747,000 in South Calgary. Your mortgage officer at BMO has informed you that the rate on mortgages is 5.50% compounded semi-annually. You are a prudent saver and currently have $125,000 in your savings accounts. After legal and closing fees, you have $114,000 available for a down payment. The rest you must borrow from the bank. You believe that a thirty-five-year amortization period will make the monthly payments manageable. What are the monthly payments to meet the terms of the mortgage? (Hint - don't lose decimals on the interest rate). You want to purchase a home for $747,000 in South Calgary. Your mortgage officer at BMO has informed you that the rate on mortgages is 5.50% compounded semi-annually. You are a prudent saver and currently have $125,000 in your savings accounts. After legal and closing fees, you have $114,000 available for a down payment. The rest you must borrow from the bank. You believe that a thirty-five-year amortization period will make the monthly payments manageable. What are the monthly payments to meet the terms of the mortgage? (Hint - don't lose decimals on the interest rate).

Answer rating: 100% (QA)

SOLUTION To calculate the monthly payments for a mortgage we need to use the formula for the present ... View the full answer