A couple has made monthly payments (of equal size, rounded to the nearest cent) over the past 10 years on a 15-year mortgage of $64,000 with Bank of America. The stated annual rate on the mortgage is 5%, compounded semi-annually. They are going to renegotiate their mortgage so that they can pay off their loan over the next 10 years at a higher rate of 7% per year compounded semi-annually. The first payment at the new rate will be made at the end of the current month following the renegotiation. What will be the size of their new payment?
A couple has made monthly payments (of equal size, rounded to the nearest cent) over the past 10 years on a 15-year mortgage of $64,000 with Bank of America. The stated annual rate on the mortgage is 5%, compounded semi-annually. They are going to renegotiate their mortgage so that they can pay off their loan over the next 10 years at a higher rate of 7% per year compounded semi-annually. The first payment at the new rate will be made at the end of the current month following the renegotiation. What will be the size of their new payment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A couple has made monthly payments (of equal size, rounded to the nearest cent) over the past 10 years on a 15-year mortgage of $64,000 with Bank of America. The stated annual rate on the mortgage is 5%, compounded semi-annually. They are going to renegotiate their mortgage so that they can pay off their loan over the next 10 years at a higher rate of 7% per year compounded semi-annually. The first payment at the new rate will be made at the end of the current month following the renegotiation. What will be the size of their new payment?
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