Five years ago, a person borrowed $100,000 at an interest rate of 8% per year compounded semiannually. When the money was borrowed, he stated that he would pay it over ten years by semi-annual payments. He made his tenth payment today and has decided to refinance the balance and pay it over the next two years. If his new interest rate is 5% per year compounded monthly, what will be his new monthly payment?

Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
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Five years ago, a person borrowed $100,000 at an interest rate of 8% per year compounded semiannually.
When the money was borrowed, he stated that he would pay it over ten years by semi-annual payments.
He made his tenth payment today and has decided to refinance the balance and pay it over the next two
years. If his new interest rate is 5% per year compounded monthly, what will be his new monthly
payment?
Transcribed Image Text:Five years ago, a person borrowed $100,000 at an interest rate of 8% per year compounded semiannually. When the money was borrowed, he stated that he would pay it over ten years by semi-annual payments. He made his tenth payment today and has decided to refinance the balance and pay it over the next two years. If his new interest rate is 5% per year compounded monthly, what will be his new monthly payment?
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