Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A variable-rate mortgage of $129,000 is amortized over 25 years by equal monthly payments. After 12 months the original interest rate of 8% compounded semi-annually

image text in transcribed

A variable-rate mortgage of $129,000 is amortized over 25 years by equal monthly payments. After 12 months the original interest rate of 8% compounded semi-annually was raised to 8.9% compounded semi-annually. Three years after the mortgage was taken out, it was renewed at the request of the mortgagor at a fixed rate of 8.3% compounded semi-annually for a four-year term. (a) Calculate the mortgage balance after 12 months. (b) Compute the size of the new monthly payment at the 8.9% rate of interest. (c) Determine the mortgage balance at the end of the four-year term. (a) The mortgage balance is $ after 12 months. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The size of the new monthly payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (c) The mortgage balance is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance Version 3.1

Authors: Rachel S. Siegel

3rd Edition

1453334807, 978-1453334805

More Books

Students also viewed these Finance questions

Question

=+Discuss whether Esteban is performing in a professional manner.

Answered: 1 week ago