Question
I am trying to solve a multiple part question but am confused with how the answer key calculated: payments per period and interest cost. The
I am trying to solve a multiple part question but am confused with how the answer key calculated: payments per period and interest cost. The answer in my professors answer guide is 4417.94 and 1,169,502.36 respectively for the payments per period and interest cost. The question from our previous homework is shown below.
You want to pay off your mortgage on something called an accelerated bi-weekly payment plan. You have a mortgage of $480,000 amortized over 16 years at a rate of 2.5 percent APR compounded semi-annually.
a) What would the regular bi-weekly payment be?
b) What would the accelerated bi-weekly payment be?
I do not need the answers to a and b, all I request is how the values listed for payments per period and interest cost were calculated. Thank you.
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