USING EQUATIONS ONLY (NOT BY EXCEL)

A $300,000 mortgage is amortized over 25 years with monthly payments at an interest rate of 6% compounded semi-annually.

a. (3 Marks) Find the size of the regular monthly payment (round up to the nearest cent) and the size of the final smaller payment.

b. (1 Mark) What is the outstanding balance after 2 years?

c. (1 Mark) How much interest is paid over the life of the mortgage?

d. (3 Marks) If the mortgage was amortized over 20 years with monthly payments instead of 25 years with monthly payments. How much interest is paid over the life of the mortgage?

e. (6 Marks) ) Based on the original mortgage (A $300,000 mortgage amortized over 25 years with monthly payments at an interest rate of 6% compounded semi-annually), suppose you made a single lump sum payment of $6000 at the end of the second year of the mortgage. ). How long would it now take to pay off the mortgage (calculate the number of years)? How much interest is paid over the life of the mortgage?

f. (6 Marks) Based on the original mortgage (A $300,000 mortgage amortized over 25 years with monthly payments at an interest rate of 6% compounded semi- annually).Suppose you made a double up payment every three months (in other words every third month you make an extra payment) and at the end of each year you make a lump sum payment of $3000. How long would it now take to pay off the mortgage (calculate the number of years)? Under this scenario, how much interest is paid over the life of the mortgage?