Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have just negotiated a 5 - year mortgage on $ 3 3 2 , 1 0 0 amortized over 2 5 years at a

You have just negotiated a 5-year mortgage on $332,100 amortized over 25 years at a rate of 4.99% per year compounded semiannually.
a) What are the monthly payments? (2 marks)
b) What are the principal and interest payments each month for the first two months? (2 marks)
c) What is the outstanding principal at the end of the first 5 years? (1 mark)
d) Assume that at the end of the 5-year contract your remaining outstanding principal is $250,000. The interest rate on your mortgage is still 4.99% per year compounded semiannually, but you decide to switch to weekly payments (52 weeks per year). What is the amount of your weekly payment? (2 marks)
e) Now say your mortgage contract allows you to make a larger weekly payment, and you choose to pay $400 per week. How many years will it take to pay off the rest of your mortgage? (All other information is the same as part d).(2 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The New Public Finance

Authors: Inge Kaul, Pedro Condeicao

1st Edition

0195179978, 978-0195179972

More Books

Students also viewed these Finance questions

Question

What are the APPROACHES TO HRM?

Answered: 1 week ago

Question

3. Identify challenges to good listening and their remedies

Answered: 1 week ago

Question

4. Identify ethical factors in the listening process

Answered: 1 week ago