Mr. Lee has applied a $1,000,000 loan on his first installment of his new flat. The mortgage will be amortized over 25 years with
Mr. Lee has applied a $1,000,000 loan on his first installment of his new flat. The mortgage will be amortized over 25 years with monthly payments based on a nominal rate of 6% compounded monthly. (a) What is the monthly payment of the mortgage? (b) Find the outstanding principal of the loan after paying the 240th payment. (c) Show the amortization schedule entries for the 241st and 242nd payments. (d) Suppose the nominal rate of the mortgage is increased to 12% compounded monthly after the loan has been repaid for 10 years. Use the result of (c), or otherwise, calculate the new monthly payment.
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Step: 1
a The monthly payment of the mortgage can be calculated using the following formula Monthly Payment P r1rn1rn1 where P principal amount r interest rate in decimal form and n number of payments In this ...
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Step: 2
Step: 3
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Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
6th Edition
78025532, 978-0077523732, 77523733, 978-0078025532
