A mortgage of $656,000 is amortized over 25 years by making end-of-month payments of $4,120. Your calculator must be set to 2 decimals before doing any calculations that are going to involve Amortization. a.) What is the annual rate of interest compounded semi-annually? (Correct to exactly 4 decimal places.) Once you have seen what this is, to 4 decimal places, set your calculator back to 2 decimal places before using the AMORT function. b.) What is the value of the final (partial) payment? The final payment required to make the outstanding balance equal exactly zero. (Use the BAII+: Do not calculate this by hand.) c.) What is the total interest cost for the debt over 25 years (300 payments)? (Use the BAII+: Do not calculate this by hand.)
A mortgage of $656,000 is amortized over 25 years by making end-of-month payments of $4,120. Your calculator must be set to 2 decimals before doing any calculations that are going to involve Amortization. a.) What is the annual rate of interest compounded semi-annually? (Correct to exactly 4 decimal places.) Once you have seen what this is, to 4 decimal places, set your calculator back to 2 decimal places before using the AMORT function. b.) What is the value of the final (partial) payment? The final payment required to make the outstanding balance equal exactly zero. (Use the BAII+: Do not calculate this by hand.) c.) What is the total interest cost for the debt over 25 years (300 payments)? (Use the BAII+: Do not calculate this by hand.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A mortgage of $656,000 is amortized over 25 years by making end-of-month payments
of $4,120.
Your calculator must be set to 2 decimals before doing any calculations that are
going to involve Amortization.
a.) What is the annual rate of interest compounded semi-annually?
(Correct to exactly 4 decimal places.)
Once you have seen what this is, to 4 decimal places, set your calculator back to 2
decimal places before using the AMORT function.
b.) What is the value of the final (partial) payment?
The final payment required to make the outstanding balance equal exactly zero.
(Use the BAII+: Do not calculate this by hand.)
c.) What is the total interest cost for the debt over 25 years (300 payments)?
(Use the BAII+: Do not calculate this by hand.)
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