interest rate for the first five-year term of a $400,000 mortgage loan is 3.3% compounded semi-annually. The mortgage requires monthly payments over a 25-year period. Suppose that, at the end of the third year of the mortgage, the borrower makes a prepayment of $80,000. How much will the amortization period be shortened?
interest rate for the first five-year term of a $400,000 mortgage loan is 3.3% compounded semi-annually. The mortgage requires monthly payments over a 25-year period. Suppose that, at the end of the third year of the mortgage, the borrower makes a prepayment of $80,000. How much will the amortization period be shortened?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question 3: The interest rate for the first five-year term of a $400,000 mortgage loan is 3.3% compounded semi-annually. The mortgage requires monthly payments over a 25-year period. Suppose that, at the end of the third year of the mortgage, the borrower makes a prepayment of $80,000. How much will the amortization period be shortened?
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