Alexandira want to purchase a new house when she graduate. The house that e want costs $600,000. She will make a down payment of $50,000 and finance the remaining $550,000 with a residential mortgage, repayable monthly over 25 years.

If the bank is currently charging 8%, compounded semi-annually, on mortgage loans, what is the effective annual interest rate on the loan?

8.22%

8.16%

8.25%

8.10%

What are your monthly payments?

$4,197.67

$2,447.11

$3,788.25

$3,448.21

$4,303.34

How much interest will be paid on the mortgage over its 25-year life?

$741,035

$709,302

$674,924

$691,778

$721,335

What is the balance outstanding on the mortgage after five years of payments have been made?

$506,747

$508,426

$504,447

$498,888

$505,991