Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A $ 200 000 loan is made with 30 years maturity and monthly compounded. The loan is based on a teasing rate of 2% and the market rate is 6%. The difference will be added to loan balance after 1 year and reset date is 1year. After that, the new pay rate is 7%.
a)What is the PMT in year 1? What is the loan balance at the end of year 1 ?
b) What is the PMT in year 2? What is the loan balance at the end of year 2?
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