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Karen has applied for a mortgage on a new house at a Canadian bank. The cost of the house is $650,000 and Karen will put
Karen has applied for a mortgage on a new house at a Canadian bank. The cost of the house is $650,000 and Karen will put 25% down as a down payment. The mortgage will be paid off in 35 years. The nominal interest rate is 6% per year compounded semi-annually.
1) What will be the principle amount of the mortgage at the time the house is purchased?
2) What is the effective annual interest rate?
3) Calculate Karen's payments if the mortgage is due:
a) Monthly
b) Bi-weekly
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