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You will receive 13 payments of $535, where the first payment will be received today (Month 0) and all other payments will be received
You will receive 13 payments of $535, where the first payment will be received today (Month 0) and all other payments will be received in 10-month intervals (Months 10, 20, 30 ... 120). Assume that the appropriate EAR is 7.68 percent. Given this information, determine the present value of these 13 payments at Month 0. Assume that you take out a 30-year mortgage (360 months) with a face value of $425,000 and a stated annual rate of 2.06%. Given this information, and assuming no prepayments, determine what percentage of your 153rd monthly payment will go towards interest.
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Step: 1
To determine the present value of the 13 payments we can use the formula for the present value of an annuity PV PMT 1 1 rn r Where PV Present Value PM...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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