Question
Your job in Middle Musquodoboit has been working out really well and you have decided to purchase a piece of property with a farmhouse and
Your job in Middle Musquodoboit has been working out really well and you have decided to purchase a piece of property with a farmhouse and a barn on the land near your work. The property has a barn where they can raise cows, horses, chickens, sheep, and plant spaghetti trees. You have managed to save $40,000 to use as a down payment on the $400,000 price. You negotiate with the bank to finance your purchase over 25 years making monthly payments. The bank is offering a 25-year amortized mortgage loan at 5.25 percent with a 5-year term.
a. Calculate your monthly payments for this loan. Show your work! (4 marks)
b. Prepare an amortization table for the first 5 months of your mortgage.
(3 marks)
c. At the end of the 5-year term of your mortgage, how much will you still owe on your loan?Show your work! (3 marks)
d. If you refinance your loan for the remaining 20 years at a negotiated interest rate of 3.75%, what are you new loan payments? Show your work! (4 marks)
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