A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The loan will be $200,000 at 6 percent interest for 20 years. Required: a. What would be the maturity period if payments are bi-weekly? How much will the borrower pay in total under each payment options Which choice would be less costly to the borrower? b. Assume that the bi-weekly loan was available for 575% What would be the maturity period if payments are bi-weekly? How much will the borrower pay in total under each payment option? Which choice would be less costly to the borrower? Complete this question by entering your answers in the tabs below. Required B What would be the maturity period if payments are bi-weekly? How much will the borrower pay in total under each payment option? Which choice would be less costly to the borrower? (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Required A

Problem:  Please answer the following questions regarding a $300,000 Mortgage Loan with monthly amortization over 30 years and an annual interest rate of 6%.    What is the loan payment for a (30 year loan (360 monthly payments) of $300,000 at 6%?   Question Answer What is the monthly payment amount? Loan Monthly Payment: How much interest and how much is principle on the first payment? Interest: Principle: How much interest and how much is principle on the second payment? Interest: Principle: If after the second payment an addition $10,000 was paid on principle.  How much would the interest be on the third payment? Interest:

Imagine you get a $450,000 closed floating rate mortgage (no CMHC needed) having a three-year term and amortized over 25 years. Although the interest rate on the mortgage would change, your monthly payments would remain fixed for the term. Monthly payments would be calculated based on APR of %4.8 compounded monthly and amortization period of 25 years. The actual amount of the interest accrued will be deducted from your fixed monthly payments and the rest would be used for principal repayment. Now, assume that the floating rate itself is 4.2% for the first 6 months, then suddenly jumps to 6% for the next 12 months, then drops to 3.6% for the next 6 months, and then declines to 3% for the final 12 months. Note that all rates are quoted as an APR and compounded monthly. Part A: How much money do you owe (i.e. what is the outstanding balance) after 18 months? Part B: How much interest did you pay over the term of the mortgage? How much was principal?

Assume we have a $500,000 mortgage at a 3.5% original interest rate, 30-year term, and monthly payments. The interest rate can be adjusted at the end of each year, and we assume the rate increases by 0.25% after the first year. What is the monthly payment for the 4th year of the loan?