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A prospective purchaser has made an offer to purchase a property for $115,000, given that the vendor will provide financing at the rate of 1.2%
A prospective purchaser has made an offer to purchase a property for $115,000, given that the vendor will provide financing at the rate of 1.2% per month. The vendor take-back is for $75,000 with monthly payments. The mortgage is to be written over a 25 -year period, but will have a term of only 5 years. What is the market value of this offer if the market rate of interest on a partially amortized mortgage is 18% per annum, compounded monthly? (a) Calculate the monthly payment required under the $75,000 mortgage. (b) Calculate the outstanding balance at the end of the term. (c) Using the market rate of interest, calculate the market value of the mortgage (d) Calculate the market value of the offer
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