Question
A mortgage currently has an outstanding balance of 400,000. There are 320 level amortizing monthly payments remaining. (The most recent payment has just been made).
A mortgage currently has an outstanding balance of 400,000. There are 320 level amortizing monthly payments remaining. (The most recent payment has just been made). The mortgage has a nominal annual rate of 5% converted monthly.
The homeowner is starting a new job, and his pay date is moving. He asks the bank if he could move the monthly payments from the 1st of each month to the 7th. The bank agrees to this. The final mortgage payment will increase to account for this delay in his payment date going forward.
By how much did his final payment increase?
Step by Step Solution
3.40 Rating (153 Votes )
There are 3 Steps involved in it
Step: 1
Increased Final Payment due to Delayed Payment Date Given Loan balance L 400000 Remaining payments n ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started