Your employer has just transferred you to beautiful Winnipeg. Since you anticipate being at the branch here for some time, you have decided to purchase a condo downtown. The condo you want to purchase is being listed at $385,000. The mortgage officer at your financial institution has informed you that the current rate on mortgages is 4.80%, compounded semiannually. Fortunately, you are a prudent saver and have managed to amass the 10% down payment in your savings account. You have decided to take the mortgage on an 18year amortization period hoping that this will keep the every second week (26 payments/year) payments manageable.

1. What is your bi-weekly (every second week) interest rate for this mortgage? (1 mark)

2. What is the biweekly payment for this mortgage (2 marks)

3. What is the effective per annum interest rate that you are paying on this mortgage? (1 mark)

4. How much of your first payment will be principal? (2 marks)

5. If your employer moves you again in 4 years and you must sell your condo, how much principal do you still owe the bank? (2 marks)