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A $100,000 mortgage is to be repaid over a ten-year period by monthly payments rounded up to the next-higher $100. Interest is 7.8% compounded semi-annually.
A $100,000 mortgage is to be repaid over a ten-year period by monthly payments rounded up to the next-higher $100. Interest is 7.8% compounded semi-annually.
(a) | Determine the number of rounded payments required to repay the mortgage. |
(b) | Determine the size of the last payment. |
(c) | Calculate the amount of interest saved by rounding the payment up to the next higher $100 versus rounding the payment to the nearest cent. |
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