10) Jake and James received a 15-year mortgage of $300,000 to purchase a condominium. They negotiated a fixed interest rate of 4% compounded semi-annually for a 5-year term. Their mortgage contract also stated that they could prepay 8% of the original principal every year without an interest penalty. By how much did their amortization period shorten if: (1) the first year? They made a prepayment of $30,000 at the end of (i) They Increase the perlodic payment by 20%

10) Jake and James received a 15-year mortgage of $300,000 to purchase a condominium. They negotiated a fixed interest rate of 4% compounded semi-annually for a 5-year term. Their mortgage contract also stated that they could prepay 8% of the original principal every year without an interest penalty. By how much did their amortization period shorten if: (1) the first year? They made a prepayment of $30,000 at the end of (i) They Increase the perlodic payment by 20%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 24PROB

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