Answered: The Houwerchucks repay a mortgage for…

The Houwerchucks repay a mortgage for $150 000.00 at 3.8% per year compounded semi- annually for 20 years. What percent of their total payment is interest? O a) 53% O b) 30% O c) 70% O d) 50%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

The Houwerchucks repay a mortgage for $150
000.00 at 3.8% per year compounded semi-
annually for 20 years.
What percent of their total payment is interest?
O a) 53%
O b) 30%
O c) 70%
d) 50%

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