a) Determine the monthly payment amount assuming an effective interest rate of 1.6% per annum. (b) After having made 5 years of payments the family takes out a new mortgage with an effective interest rate of 6% per annum for the remaining 15 years. Payments are made monthly in arrears. Determine the new monthly payment amount. (c) If the family would have originally agreed to make monthly instalments of £2,000 paid at the beginning of each month starting on 1.1.2022, when would they have paid off the loan? Assume an effective interest rate of 1.6% per annum throughout.
A family has taken out a mortgage of £450,000 to purchase a house on 1.1.2022. The mortgage is repaid in monthly instalments at the beginning of each month over 20 years.
(a) Determine the monthly payment amount assuming an effective interest rate of 1.6% per annum.
(b) After having made 5 years of payments the family takes out a new mortgage with an effective interest rate of 6% per annum for the remaining 15 years. Payments are made monthly in arrears. Determine the new monthly payment amount.
(c) If the family would have originally agreed to make monthly instalments of £2,000 paid at the beginning of each month starting on 1.1.2022, when would they have paid off the loan? Assume an effective interest rate of 1.6% per annum throughout.
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