Kimiko signed a mortgage requiring payments of $203.85 at the end of every month for 4 years at 6.1% compounded monthly. (a) How much was the original mortgage balance? (b) If Kimiko missed the first 7 payments, how much would she have to pay after 8 months to bring the mortgage payments up to date? (c) How much would Kimiko have to pay after 8 months to pay off the mortgage (assuming she missed all the payments)?
Kimiko signed a mortgage requiring payments of $203.85 at the end of every month for 4 years at 6.1% compounded monthly. (a) How much was the original mortgage balance? (b) If Kimiko missed the first 7 payments, how much would she have to pay after 8 months to bring the mortgage payments up to date? (c) How much would Kimiko have to pay after 8 months to pay off the mortgage (assuming she missed all the payments)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Kimiko signed a mortgage requiring payments of
$203.85
at the end of every
month
for
4
years at
6.1%
compounded monthly.(a) How much was the original mortgage balance?
(b) If Kimiko missed the first
7
payments, how much would she have to pay after
8
months to bring the mortgage payments up to date?(c) How much would Kimiko have to pay after
8
months to pay off the mortgage (assuming she missed all the payments)?(d) If the mortgage were paid off after
8
months, what would the total interest cost be?(e) How much of the total interest cost is additional interest because of the missed payments?
(a) The original mortgage balance was
$nothing.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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