Kim purchased a $250,000 condominium in Halifax with a down payment of 25% of the amount. She received a 20-year mortgage for the balance at a fixed interest rate of 4.75% compounded semi-annually for a three-year term. Payments were to be 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 three-year term?

c. By how much did the amortization period shorten if the size of the periodic payments were increased by 10% starting from the 37th payment?

AppendixLO1