The Grewals agreed to monthly payments on a mortgage of $366,000.00 amortizedover 25 years. Interest for the first five years was 4.7% compounded semi-annually.a. Determine the Grewals' monthly payments.b. Determine the balance owing after the 5-year term.c. Before renewing for another term of 5 years at 5.4% compounded semiannually, theGrewals make an additional payment of $20,000. If they keep the same monthlypayments, by how much will the amortization period be shortened?

The mortgage payment is the method by which an individual repays their house loan. his is usually a…

Answered: The Grewals agreed to monthly payments…

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

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Adam received a low-interest loan of $25,000 from his employer on January 1st. The loan is to be repaid in equal annual installments at the end of each of five years, along with interest of 2.5%. Adam paid the interest and the first annual installment on December 31. Suppose that the federal prescribed interest rates for employees for the first year of Adam's loan were as follows: 1st Quarter = 5.0%, 2nd Quarter = 5.5%, 3rd Quarter = 6.0 %, 4rth Quarter = 6.5%. What is the amount of Adam's taxable benefit during the first year? a) $0.00 b) $750.00 c) $812.50 d) $1,000.00
A variable-rate mortgage of $124,000 is amortized over 25 years by equal monthly payments. After 18 months the original interest rate of 5% compounded semi-annually was raised to 8.5% compounded semi-annually. Three years after the mortgage was taken out, it was renewed at the request of the mortgagor at a fixed rate of 7.4% compounded semi-annually for a four-year term. (a) Calculate the mortgage balance after 18 months. (b) Compute the size of the new monthly payment at the 8.5% rate of interest. (c) Determine the mortgage balance at the end of the four-year term. (a) The mortgage balance is $ after 18 months. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Juwen obtained a 25-year residential mortgage at 4.75% compounded semiannually for a 5-year term. If the initial loan was $381,500 how much will the monthly mortgage payments be?
A $96,000 mortgage is to be amortized by making monthly payments for 20 years. Interest is 7.1% compounded semi-annually for a six-year term. (a) Compute the size of the monthly payment. (b) Determine the balance at the end of the six-year term. (c) If the mortgage is renewed for a six-year term at 6% compounded semi-annually, what is the size of the monthly payment for the renewal term?
Erin has a mortgage of $640,000 through the Tangerine Bank for a vacation property. The mortgage is repaid by end of month payments with an interest rate of 5.3% compounded monthly for a term of 5 years, amortized over 25 years. At the end of the 5-year term, Erin will renew the mortgage for another 5-year term at a new, lower interest rate of 4.4% compounded monthly. Round ALL answers to two decimal places if necessary. 1) What are the end of month payments before the renewal of the mortgage? P/Y = 12 I/Y = 0.4 P1 = 640,000 X x% P/Y = 12 2) What is the balance when the mortgage is renewed? I/Y = 0.03 C/Y = 12 PV = $ 640,000 x% PMT= $3,854.09 (enter the rounded value into the calculator) P2= 70,408.34 X 3) What will be the new end of month payments after the mortgage is renewed? C/Y = 12 PV = $5,69,591.66 X N = 300 PMT $3,572.84 FV = $0 BAL= $5,69,591.66 x Enter a positive value. N = 240 FV = $0
A mortgage balance of $28,000 is to be repaid over a 15-year term by equal monthly payments at 4.9% compounded semi-annually. At the request of the mortgagor, the monthly payments were set at $425. (a) (b) What is the size of the last payment? (c) Determine the difference between the total amount required to amortize the mortgage with the contractual monthly payments rounded to the nearest cent and the total actual amount paid. How many payments will the mortgagor have to make? (a) The mortgagor will have to make payments. (Round up to the nearest whole number.)
On January 1, Year 1, Philip Holding invests $40,000 in an annuity to provide 8 equal semi-annual payments. Interest is 10%, compounded semiannually. Compute the equal semiannual amounts that Philip will receive assuming that the first withdrawal is to be received on:July 1, Year 4
Hassan borrows AED 4,000,000 to be repaid over 15 years at 7 percent. What is the repayment of principal in the first three years and the total interest to be paid.
Courtney deposited $1,100 at the end of every month into an RRSP for 8 years. The interest rate earned was 4.75% compounded semi- annually for the first 3 years and changed to 5.00% compounded monthly for the next 5 years. What was the accumulated value of the RRSP at the end of 8 years?
Derek deposited $700 at the end of every month into an RRSP for 7 years. The interest rate earned was 3.75% compounded semi-annually for the first 5 years and changed to 4.00% compounded monthly for the next 2 years. What was the accumulated value of the RRSP at the end of 7 years? Round to the nearest cent
A mortgage of $169,900 was taken out when the 5-year mortgage interest rate was 3.2% compounded semi-annually. 50 months later, the 5-year mortgage interest rate has decreased to 2.5%. What would be the new blend-and-extend mortgage rate if this mortgage is refinanced for a new 5-year term? Select one: a. 6.80% b. 3.08% c. 6.18% d. 7.20% e. 2.61%
Luis deposited $900 at the end of every month into an RRSP for 9 years. The interest rate earned was 4.50% compounded semi-annually for the first 4 years and changed to 4.75% compounded monthly for the next 5 years. What was the accumulated value of the RRSP at the end of 9 years? Round to the nearest cent

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