$ 500 is paid every month for 20 years as a mortgage amount for a cottage. Initially, a downpayment of 5,000 was made. Consider a nominal interest rate set at 6 percent. Consider compounding periods as monthly a) Draw the cash flow diagram b) What is the monthly interest rate? c) What was the purchase price of the cottage?
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
$ 500 is paid every month for 20 years as a mortgage amount for a cottage. Initially, a downpayment of 5,000 was made. Consider a nominal interest rate set at 6 percent. Consider compounding periods as monthly a) Draw the cash flow diagram b) What is the monthly interest rate? c) What was the purchase price of the cottage?
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