A $100,000 mortgage is amortized over 20 years with monthly payments at an interest rate of 8% compounded semi-annually. Suppose you paid an extra $1000 at the end of each year, how many years, would it now take to pay off the mortgage and how much interest would be paid over the life of the mortgage?
A $100,000 mortgage is amortized over 20 years with monthly payments at an interest rate of 8% compounded semi-annually. Suppose you paid an extra $1000 at the end of each year, how many years, would it now take to pay off the mortgage and how much interest would be paid over the life of the mortgage?
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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![A $100,000 mortgage is amortized over 20 years with monthly payments at an interest
rate of 8% compounded semi-annually. Suppose you paid an extra $1000 at the end of each
year, how many years, would it now take to pay off the mortgage and how much interest would be
paid over the life of the mortgage?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac44c42e-125b-4391-b964-aac832df4ca4%2F09b42aa6-1d4b-4999-aead-b27bca5e28ce%2Fbiuih7_processed.png&w=3840&q=75)
Transcribed Image Text:A $100,000 mortgage is amortized over 20 years with monthly payments at an interest
rate of 8% compounded semi-annually. Suppose you paid an extra $1000 at the end of each
year, how many years, would it now take to pay off the mortgage and how much interest would be
paid over the life of the mortgage?
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