Question
The largest amount of bi-weekly payments Konstantin can afford is $1,600.00. The amortization period for any of the mortgages below is at most 25 years.
The largest amount of bi-weekly payments Konstantin can afford is $1,600.00. The amortization period for any of the mortgages below is at most 25 years. a) What is most expensive house Konstantin can buy (with no money down!) if the interest rate on the mortgage is 1.250% compounded monthly. b) If Konstantin insists on a 20 year amortization period, now what is the most expensive house he can afford? (Still with no money down and the same interest rate as in part a) ) c) Konstantin's mortgage broker says that with those payments (and a 25 year amortization period) they can afford a $737,000.00 house. What is the interest rate r(12)? d) If Konstantin insists on a 15 year amortization period, and the interest rate is the same as in c), what is the most expensive house he can afford?
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