The Sahota's agreed to monthly payments on a mortgage of $633,000.00 amortized over 25 years. They negotiate an interest rate of 4.25% compounded semi-annually for the first 5 year term of the mortgage. a. Determine the Sahota's monthly payments. b. Determine the balance owing after the 5-year term. C. Upon renewing for another term of 5 years at 4.3% compounded semiannually, the Sahota's increase the payments by 10%. By how much will the amortization period be shortened?

The Sahota's agreed to monthly payments on a mortgage of $633,000.00 amortized over 25 years. They negotiate an interest rate of 4.25% compounded semi-annually for the first 5 year term of the mortgage. a. Determine the Sahota's monthly payments. b. Determine the balance owing after the 5-year term. C. Upon renewing for another term of 5 years at 4.3% compounded semiannually, the Sahota's increase the payments by 10%. By how much will the amortization period be shortened?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 25E

See similar textbooks

Similar questions

The Grewals agreed to monthly payments on a mortgage of $366,000.00 amortized over 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, the Grewals make an additional payment of $20,000. If they keep the same monthly payments, by how much will the amortization period be shortened?
The Grewals agreed to monthly payments on a mortgage of $336,000.00 amortized over 20 years. Interest for the first five years was 4.5% compounded semi-annually.(using calculator) 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 4.3% compounded semiannually, the Grewals make an additional payment of $12,000. If they keep the same monthly payments, by how much will the amortization period be shortened?
The Taylors agreed to make monthly payments on a mortgage of $130,000 amortized over 15 years. Interest for the first 3 years was 7.5 percent compounded semi-annually. Determine the mortgage balance at the end of the 3-year term OA. $141,121.64 OB. $141.948.91 OC. $114,600.42 OD. $114,072.53 EXE
9) The Taylors agreed to monthly payments rounded up to the nearest $100.00 on a mortgage of $136 000.00 amortized over 15 years. Interest for the first five years was 8.5% compounded semi-annually. After 30 months, as permitted by the mortgage agreement, the Taylors increased the rounded monthly payment by 10%. a) Determine the mortgage balance at the end of the five-year term. b) If the interest rate remains unchanged over the remaining term, how many more of the increased payments will amortize the mortgage balance? c) How much did the Taylors save by exercising the increase-in-payment option?
4. The Taylors agreed to monthly payments rounded up to the nearest $100.00 on a mortgage of $136 000.00 amortized over 15 years. Interest for the first five years was 8.5% compounded semi- annually. After 30 months, as permitted by the mortgage agreement, the Taylors increased the rounded monthly payment by 10%. a) Determine the mortgage balance at the end of the five-year term. b) If the interest rate remains unchanged over the remaining term, how many more of the increased payments will amortize the mortgage balance? c) How much did the Taylors save by exercising the increase-in-payment option?
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.)
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%
7. Mr. Solo amortizes a loan of $150,000 by obtaining a 20-year mortgage at 5% compounded monthly. Find (a) the monthly payment, (b) the total interest charge, (c) the principal remaining after five years, and (d) the remaining principal
A mortgage balance of $23,960 is to be repaid over a 7-year term by equal monthly payments of 6.8% compounded semiannually. At the request of the mortgagor, the monthly payments were set at $440. How many payments will the mortgagor have to make? What is the size of the last payment? Determine the difference between the total actual amount paid through $440 payments and the total amount required through normal amortization at 6.8% to amortize the mortgage by the contractual monthly payments.
The mortgage contract states that the debtor must pay a minimum of P100,000 per year on the 7% interest, P1,000,000 loan. The balance would be due by the end of the tenth year as a lump sum. A.) Balloon payment mortgage B.) Rollover mortgage C.) Home equity loans D.) Construction to permanent mortgages
A broker arranges an interest only mortgage with a face value of $500,000 between a borrower and a bank. The mortgage has a quoted rate of 5% per annum compounded semi-annually with monthly payments rounded to the next higher dollar and for a term of 20 years. Prior to advancing the funds to the borrower, a $5000 broker commission fee (a “bonus”) is deducted from the face value of the mortgage loan and paid to the broker. Part 1: Calculate the monthly payment. Part 2: Calculate the borrower’s interest cost as effective annual rate. Part 3: Using the same facts above, instead of the borrower paying the broker the fee, the bank pays the fee. Calculate the yield to the bank as an effective annual rate. Part 4: Using the same facts above, suppose an investor offers to purchase the mortgage from the bank. If the investor requires a yield of 7% compounded annually, what is the maximum amount the investor should pay for this mortgage.
A partially amortizing mortgage is made for $75,000 for a term of 10 years. The borrower and lender agree that a balance of $23,000 will remain and be repaid as a lump sum at that time.Required: a. If the interest rate is 7 percent, what must monthly payments be over the 10-year period? b. If the borrower chooses to repay the loan after five years instead of at the end of year 10, what must the loan balance be