A variable-rate mortgage of $147,000 is amortized over 15 years by equal monthly payments. After 12 months the original interest rate of 5% compounded semi-annually was raised to 6.4% compounded semi-annually. Two years after the mortgage was taken out, it was renewed at the request of the mortgagor at a fixed rate of 5.1% compounded semi-annually for a four-year term. (a) Calculate the mortgage balance after 12 months (b) Compute the size of the new monthly payment at the 6.4% rate of interest (c) Determine the mortgage balance at the end of the four-year term.

A variable-rate mortgage of $147,000 is amortized over 15 years by equal monthly payments. After 12 months the original interest rate of 5% compounded semi-annually was raised to 6.4% compounded semi-annually. Two years after the mortgage was taken out, it was renewed at the request of the mortgagor at a fixed rate of 5.1% compounded semi-annually for a four-year term. (a) Calculate the mortgage balance after 12 months (b) Compute the size of the new monthly payment at the 6.4% rate of interest (c) Determine the mortgage balance at the end of the four-year term.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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