original mortgage balance and the loan interest rate for a customer. You know that the mortgage was a regular 30-year period amortizing loan (payments at the end of each period). You also know that the principal repaid in period 5 was $1501.20 and the principal repaid in period 6 was $1621.30. Your manager fears the situation is hopeless! You tell him not to worry and surprise him with the answer to the original loan balance. What is your answer?

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
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4. You work in the mortgage department for a bank. Data has been lost on the
original mortgage balance and the loan interest rate for a customer.
You know that the mortgage was a regular 30-year period amortizing loan
(payments at the end of each period). You also know that the principal repaid
in period 5 was $1501.20 and the principal repaid in period 6 was $1621.30.
Your manager fears the situation is hopeless! You tell him not to worry and
surprise him with the answer to the original loan balance. What is your
answer?
A) $75,000
C) $125,000
E) Insufficient information to answer
B) $100,000
D) $150,000
Transcribed Image Text:4. You work in the mortgage department for a bank. Data has been lost on the original mortgage balance and the loan interest rate for a customer. You know that the mortgage was a regular 30-year period amortizing loan (payments at the end of each period). You also know that the principal repaid in period 5 was $1501.20 and the principal repaid in period 6 was $1621.30. Your manager fears the situation is hopeless! You tell him not to worry and surprise him with the answer to the original loan balance. What is your answer? A) $75,000 C) $125,000 E) Insufficient information to answer B) $100,000 D) $150,000
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