A $87,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is 8.7% compounded semi-annually for a six-year term. (a) (b) (c) Compute the size of the monthly payment. Determine the balance at the end of the six-year term. If the mortgage is renewed for a six-year term at 6% compounded semi-annually, what is the size of the monthly payment for the renewal term?

A $87,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is 8.7% compounded semi-annually for a six-year term. (a) (b) (c) Compute the size of the monthly payment. Determine the balance at the end of the six-year term. If the mortgage is renewed for a six-year term at 6% compounded semi-annually, what is the size of the monthly payment for the renewal term?

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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The balance on a mortgage was $42,600 and an interest rate of 4.25% compounded semi-annually was charged for the remaining 3-year term. Monthly payments were made to settle the mortgage. a. Calculate the size of the monthly payments. Round up to the next whole number b. If the monthly payments were set at $1,412, how long would it take to pay off the mortgage? Express the answer in years and months, rounded to the next payment period (C). If the monthly payments were set at $1,412, calculate the size of the final payment.
5 A mortgage balance of $26,000 is to be repaid over a 12-year term by equal monthly payments at 5.1% compounded semi-annually. At the request of the mortgagor, the monthly payments were set at $450. (a) How many payments will the mortgagor have to make? (b) What is the size of the last payment? (c) Determine the difference between the total amount required to amortize the mortgage with the contractual monthly payments rounded to the nearest cent and the total actual amount paid.
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The balance on a mortgage was $43,200 and an interest rate of 5.50% compounded semi-annually was charged for the remaining 3-year term. Monthly payments were made to settle the mortgage. a. Calculate the size of the monthly payments. SO Round up to the next whole number b. If the monthly payments were set at $1,454, how long would it take to pay off the mortgage? 0 years 0 months Express the answer in years and months, rounded to the next payment period c. If the monthly payments were set at $1,454, calculate the size of the final payment. $0.00 Round to the nearest cent

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