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You obtain a loan of $ 5 0 0 , 0 0 0 from a bank to buy a house. The mortgage has a 5
You obtain a loan of $ from a bank to buy a house. The mortgage has a
year term with a fixed rate of year using Canadian mortgage convention The
amortization period of the mortgage is years.
a What is the monthly mortgage payment?
b How much do you owe the bank after the th monthly payment?
c For the th monthly payment, how much of it is for interest, and how much of
it is for principal repayment?
d Find the expression for the present value of the principal repayment for the month
mortgage payment ie a general expression for any given month Is this
present value constant over different months? What is the total present value of
the interest portion of the mortgage payments?
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