The bank offers you a 20 yearmortgage for $200,000 at aninterest rate of 8% . The term ofthe mortgage is 5 years. a) Whatare your monthly payments? b)How much of the 30th paymentis applied to interest? How muchto principal? c) Under themonthly payment schedule,what do you still owe after 5years? d) If you make paymentsevery 2 weeks instead, what areyour payments? e) Under thebiweekly payment schedule,how much do you owe after 5years?

Mortgage loan=$200000Interest rate=r=8%Period=20 yearsFind out monthly payment.As per company…

Answered: The bank offers you a 20 year mortgage…

The bank offers you a 20 year mortgage for $200,000 at an interest rate of 8%. The term of the mortgage is 5 years. a) What are your monthly payments? b)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Question

The bank offers you a 20 year
mortgage for $200,000 at an
interest rate of 8% . The term of
the mortgage is 5 years. a) What
are your monthly payments? b)
How much of the 30th payment
is applied to interest? How much
to principal? c) Under the
monthly payment schedule,
what do you still owe after 5
years? d) If you make payments
every 2 weeks instead, what are
your payments? e) Under the
biweekly payment schedule,
how much do you owe after 5
years?

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