Jane Ericsson has just purchased a 62 square-meter down-town at flat NOK 3,500,000 financed with 20% of her own capital. Financing the rest of the purchase, a 20-year NOK 2,800,000 ordinary annuity mortgage at 3.15% per year species end-of-month payments of interest including principal over the amortization period. The first payment is due one month from today. A two percent initiation fee charged by the lender requires Jane to increase her equity contribution by NOK 56,000.

It is commonly expected that down-town flats in Jane's neighborhood will appreciate by 2 percent per year over the next ten years.

Please provide numerical answers to the questions below:

(a) (7 points) Which monthly payment will amortize the mortgage-loan over the 20-year term?

(b) (7 points) What effective yield is Jane paying on the mortgage over the 20-year term?

Assume that Jane wants a 50% equity-share in her at after exactly 10 years (ie. 120 monthly payments).

Towards that end, she has received the lender's approval to adjust her monthly payment of interest and principal.

(c) (8 points) Which monthly payment accommodates a 50% ownership in the at after 10 years?

(d) (8 points) Given the monthly payment calculated in (c), how many years does it take until the loan is fully amortized (paid-down)?

!!!!! Especially for the question C, the instructor said using 2% growth for the property after 10 years which is 3,500,000(1.02)^10 --> approx. 4.2 million and half of that approx. 2.1 million for the future value of a ownership after 10 years.

I don't know how to take that into account and find PMT.

Please help with detailed calculation or explanation possible.

Thank you.