Question
i) Oppenheimer Bank is offering a 30 year mortgage with an APR of 5.22 % based on monthly compounding. With this mortgage your monthly payments
- i) Oppenheimer Bank is offering a 30 year mortgage with an APR of 5.22 % based on monthly compounding. With this mortgage your monthly payments would be $1,972 per month. Inaddition, Oppenheimer Bank offers you the followingdeal: Instead of making the monthly payment of $1,972 everymonth, you can make half the payment every two weeks(so that you will make 52/2=26 payments peryear). With thisplan, how long will it take to pay off the mortgage if the EAR of the loan isunchanged?
ii) Oppenheimer Bank is offering a 30 year mortgage with an APR of 5.15% based on monthly compounding. With this mortgage your monthly payments would be $2016 per month. Inaddition, Oppenheimer Bank offers you the followingdeal: Instead of making the monthly payment of $2,016 everymonth, you can make half the payment every two weeks(so that you will make 52/2=26 payments peryear). With thisplan, how long will it take to pay off the mortgage if the EAR of the loan isunchanged?
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Advanced Financial Accounting
Authors: Richard Lewis, David Pendrill
7th Edition
0273658492, 978-0273658498
