Question
A borrower took out a 30 year fixed rate mortgage of $130,000 at an 8% annual rate. After five years, he wishes to pay off
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A borrower took out a 30 year fixed rate mortgage of $130,000 at an 8% annual rate. After five years, he wishes to pay off the remaining balance. Interest rates have by then fallen to 7%. How much must he pay to retire the mortgage (to the nearest dollar)?
a. $118,657
b. $123,591
c. $114,042
d. $134,963
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Financial Mathematics Derivatives And Structured Products
Authors: Chan
1st Edition
9811336954, 978-9811336959
