You are planning to buy a 4 bedroom house in Hamilton that has a price of $1,500,000. One of the local banks has offered you a mortgage at a quoted rate of 4% per year. Interest will be compounded semi-annually. The bank has indicated that they will require 30% down payment. The bank is prepared to lend you the remainder of the purchase price of the house. The amortization period will be 40 years and the term of the mortgage will be 2 years. You are going to make monthly payments on your mortgage. The payments will be made at the end of each period.

i.What is the amount of your periodic payment?

ii.How much will you pay in total on your mortgage over the life of your mortgage?

iii.What is total interest that will be paid over the life of your mortgage?

iv.How much principal will you have paid off during the initial term of your mortgage?

v.How much interest will you have paid off during the initial term of your mortgage?