All the Peanuts characters pool their money to buy an Old House. They take out a 13 year mortgage for 88000 dollars at a rate of interest of 5.4 percent convertible monthly, agreeing to make equalmonthly payments with the first due one month later. Immediately after making the 20th payment, they decide to hire Bob Villa to remodel their house. To do this, they will need to refinance their loan and alsoborrow an additional 100,000 dollars. They make a deal with the lender where they will pay off the balance owed (on the original loan plus the additional 100,000 dollars) with 22 more years of equal monthlypayments. The lender agrees, provided that its yield rate on the ENTIRE LOAN is 9.9 percent convertible monthly. Under these new terms, what is their new monthly payment?Answer =1675.224dollars.

Initial mortgage (L) = $88000 n = 13 years = 156 months r = 5.4% per annum = 0.45% per month Let M =…

Answered: All the Peanuts characters pool their…

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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