Kobe has a mortgage for $798,337.00. The term of the mortgage is 4 years, and the amortization period is 25 years. Kobe will make monthly payments and the mortgage rate is r(²) = 4.000%. After 2 years, the interest rate drops to 3.250% compounded semi-annually, and he decides to refinance his loan. In order to refinance, she has to pay a penalty of 3 months interest (based on the original interest rate), which is added to the outstanding balance on the new mortgage. a) What is the outstanding balance at the time Kobe decides to refinance (not including the penalty)? $ b) What is the amount of the penalty? $ c) The new mortgage has is for the outstanding balance plus the penalty. The term is 2 years, and the amortization period is 23 years. What are the the new monthly payments? $

Kobe has a mortgage for $798,337.00. The term of the mortgage is 4 years, and the amortization period is 25 years. Kobe will make monthly payments and the mortgage rate is r(²) = 4.000%. After 2 years, the interest rate drops to 3.250% compounded semi-annually, and he decides to refinance his loan. In order to refinance, she has to pay a penalty of 3 months interest (based on the original interest rate), which is added to the outstanding balance on the new mortgage. a) What is the outstanding balance at the time Kobe decides to refinance (not including the penalty)? $ b) What is the amount of the penalty? $ c) The new mortgage has is for the outstanding balance plus the penalty. The term is 2 years, and the amortization period is 23 years. What are the the new monthly payments? $

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 5E

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