A $300,000 apartment in Edmonton was purchased with a down payment of 20% of the amount. A 25-year mortgage was obtained for the balance. The negotiated fixed interest rate was 5.50% compounded semi-annually for a five-year term with repayments made at the end of every month.

a. What is the size of the monthly payment?

b. What was the principal balance at the end of the five-year term?

c. By how much did the amortization period shorten if the size of the periodic payments was increased by 5% starting from the 61" payment?

AppendixLO1