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Home Q & A Board Science-Related Homework Help Mathematics
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Lada Lada
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6 years ago
A $248 000.00 mortgage amortized by monthly payments over 35 years is renewable after five years. Interest is 8.12% compounded semi-annually.
a) What is the size of the monthly payments?
b) How much interest is paid during the first year?
c) How much of the principal is repaid during the first five-year term?
d) If the mortgage is renewed for a further five-year term at 7.16% compounded semi-annually, what will be the size of the monthly payments?
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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#1
6 years ago
p =   - 1 = 0.00665496
a)    248000 = PMT
   248000 = PMT(140.995881)
   $1758.92 = PMT

b)    PVn = 1758.92
   = 1758.92(140.2280408) = $246,649.91
   Total paid = 12(1758.92)    = $ 21 107.04
   Principal repaid = 248000.00 - 246,649.91   =       1350.09
   Interest paid   = $  19756.95

c)    PVn = 1758.92
   = 1758.92(136.465612) = $240 032.09
   248 000.00 - 240 032.09 = $7967.91 principal repaid

d)    p =   - 1 = 0.0058796
   240032.09 = PMT
   240032.09 = PMT(149.469597)
   $1605.89 = PMT
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