Assume that 3 years ago you arranged a fixed rate mortgage of $ 5 0 0 , 0 0 0 with CIBC at � 2 = 6 % ( 2 mears. compounded semi - annually ) amortized over 2 5 years with monthly payments and a 5 - year term. The currently prevailing fixed rates have been much lower than before. This makes you consider refinancing the mortgage. You are wondering how much penalty to pay: ( a ) three - month interests ( b ) interest rate differential. Suppose currently CIBC has posted the following fixed rates ( think about which one to use here ) . \ table [ [ Length of Term, � 2
Assume that 3 years ago you arranged a fixed rate mortgage of $ 5 0 0 , 0 0 0 with CIBC at � 2 = 6 % ( 2 mears. compounded semi - annually ) amortized over 2 5 years with monthly payments and a 5 - year term. The currently prevailing fixed rates have been much lower than before. This makes you consider refinancing the mortgage. You are wondering how much penalty to pay: ( a ) three - month interests ( b ) interest rate differential. Suppose currently CIBC has posted the following fixed rates ( think about which one to use here ) . \ table [ [ Length of Term, � 2
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
Related questions
Question
Assume that
3
years ago you arranged a fixed rate mortgage of $
5
0
0
,
0
0
0
with CIBC at
�
2
=
6
%
(
2
mears. compounded semi
-
annually
)
amortized over
2
5
years with monthly payments and a
5
-
year term. The currently prevailing fixed rates have been much lower than before. This makes you consider refinancing the mortgage. You are wondering how much penalty to pay:
(
a
)
three
-
month interests
(
b
)
interest rate differential. Suppose currently CIBC has posted the following fixed rates
(
think about which one to use here
)
.
\
table
[
[
Length of Term,
�
2
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