Thema just qualified to receive a mortgage from her bank at 3.5% compounded semi-annually for a five-year term. She purchased an apartment worth $220,000 and paid 10% as a down payment. The amortization period for the mortgage was 25 years and she was required to make monthly payments to settle the mortgage.

a. What is the monthly payment amount?

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

c. What is the monthly payment amount if the mortgage was renewed for another five-year fixed term at 4.5% compounded semi-annually?

AppendixLO1