interest rate for the first five-year term of a $400,000 mortgage loan is 3.3% compounded semi-annually. The mortgage requires monthly payments over a 25-year period. Suppose that, at the end of the third year of the mortgage, the borrower makes a prepayment of $80,000. How much will the amortization period be shortened?
interest rate for the first five-year term of a $400,000 mortgage loan is 3.3% compounded semi-annually. The mortgage requires monthly payments over a 25-year period. Suppose that, at the end of the third year of the mortgage, the borrower makes a prepayment of $80,000. How much will the amortization period be shortened?
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter7: Using Consumer Loans
Section: Chapter Questions
Problem 6FPE
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Question 3: The interest rate for the first five-year term of a $400,000 mortgage loan is 3.3% compounded semi-annually. The mortgage requires monthly payments over a 25-year period. Suppose that, at the end of the third year of the mortgage, the borrower makes a prepayment of $80,000. How much will the amortization period be shortened?
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