(6) Marian has just purchased a house. She has a $400,000, 20-year mortgage with interest at an annual rate of 4.5% a year, compounded continuously. Assuming Marian pays her mortgage continuously with a fixed amount: (a) How much is her monthly payment? (b) If she pays an extra $400 each month, how soon can she pay off the mortgage? (c) How much money can Marian save by paying an extra $400 each month?
(6) Marian has just purchased a house. She has a $400,000, 20-year mortgage with interest at an annual rate of 4.5% a year, compounded continuously. Assuming Marian pays her mortgage continuously with a fixed amount: (a) How much is her monthly payment? (b) If she pays an extra $400 each month, how soon can she pay off the mortgage? (c) How much money can Marian save by paying an extra $400 each month?
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 5E
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![(6) Marian has just purchased a house. She has a $400,000, 20-year mortgage with interest at an
annual rate of 4.5% a year, compounded continuously. Assuming Marian pays her mortgage
continuously with a fixed amount:
(a) How much is her monthly payment?
(b) If she pays an extra $400 each month, how soon can she pay off the mortgage?
(c) How much money can Marian save by paying an extra $400 each month?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff71eadad-d8d4-4a8d-9c83-99b5e5e5cd40%2F6675480b-b2fe-44f3-a884-55cd88270642%2Fcm1kiu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(6) Marian has just purchased a house. She has a $400,000, 20-year mortgage with interest at an
annual rate of 4.5% a year, compounded continuously. Assuming Marian pays her mortgage
continuously with a fixed amount:
(a) How much is her monthly payment?
(b) If she pays an extra $400 each month, how soon can she pay off the mortgage?
(c) How much money can Marian save by paying an extra $400 each month?
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