A $30 000.00 mortgage is amortized by monthly payments over twenty years and is renewable after five ...

a)   PV = 30 000.00; n = 20(12) = 240; i =   = 0.0425; I/Y = 8.5; P/Y = 12; C/Y = 2; c =   = 
   p = (1 + i)c = (1 + 0.0425)1/6 - 1 = 0.006961062
   30000 = PMT
   30000 = PMT[116.4742048]
   PMT = $257.57

   The number of outstanding payments after five years is 15(12) = 180
   PV = 257.57
   PV = $26 386.10

Programmed solution:


b)    The outstanding balance of $26 386.10 is to be amortized the remaining 15 years.
   PV = 26 386.10; n = 15(12) = 180; i =   = 0.04; I/Y = 8; P/Y = 12; C/Y = 2; c =   = 
   p = (1 + i)c - 1 = 0.006558197
   26386.10 = PMT
   26386.10 = PMT[105.4682161]
   PMT = $250.18


Programmed solution:


c)   At the end of the 3 year term the outstanding payments is 144.
   PV = 250.18
   PV = $23 265.45

Programmed solution: