1. Your friend is taking out a mortgage for $217,000 at 8.25% repayable with quarterly payments over 30 years. She respects your financial expertise and asks "how many payments will I have to make before I reduce the principal balance by 30% its original amount." You pull out your calculator, and tell her the number of payments she'll make to reduce the balance by 30% is: 2. You made a $6000 deposit last year in an account that earns 11% interest compounded quarterly. Compute how much the total interest-on-interest is when you close the account exactly 6 years from today.

1. Your friend is taking out a mortgage for $217,000 at 8.25% repayable with quarterly payments over 30 years. She respects your financial expertise and asks "how many payments will I have to make before I reduce the principal balance by 30% its original amount." You pull out your calculator, and tell her the number of payments she'll make to reduce the balance by 30% is: 2. You made a $6000 deposit last year in an account that earns 11% interest compounded quarterly. Compute how much the total interest-on-interest is when you close the account exactly 6 years from today.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 28P

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You bought a house for $500,000 with a 30 year bank loan that has quarterly payments at an interest rate of 7% (APR). Immediately after year 10 (20 years left on the loan). You will resell the house for $ 600,000 and completely pay off the rest of the loan. How much do you have to pay the bank to completely pay off the loan? $428, 652.86 $426,866.75 $361, 273.83 $514,383.43
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