Oppenheimer Bank is offering a 30-year mortgage with an APR of 4.97% based on monthly compounding. With
Question:
Oppenheimer Bank is offering a 30-year mortgage with an APR of 4.97% based on monthly compounding. With this mortgage your monthly payments would be $1996 per month. In addition, Oppenheimer Bank offers you the following deal: Instead of making the monthly payment of $1996 every month, you can make half the payment every two weeks (so that you will make 52/2 = 26 payments per year). With this plan, how long will it take to pay off the mortgage if the EAR of the loan is unchanged?
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Heres how to calculate the time it takes to pay off the mortgage with biweekly payments 1 Calculate the effective monthly interest rate We know the EA...View the full answer
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Jehal Shah
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Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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