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Suppose you take out a mortgage for $100,000, repayable over 20 years. (The mortgage, like most mortgages, is in the form of an amortizing loan).
Suppose you take out a mortgage for $100,000, repayable over 20 years. (The mortgage, like most mortgages, is in the form of an amortizing loan). The interest rate is 5% annually compounded and the mortgage payments are made annually at the end of each year a. What is your annual mortgage payment? b. Construct a table that shows, foreach year, the remaining balance on the mortgage. c. What fraction of the first payment on the mortgage is interest? d. What fraction of the last payment on the mortgage is interest
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