The interest rate for the first five years of a $95,000 mortgage is 7.2% compounded semiannually. Monthly payments are based on a 25-year amortization. Suppose a $3,000 prepayment is made at the end of the third year. a. How much will the amortization period be shortened? b. What will be the principal balance at the end of the five-year term?

The interest rate for the first five years of a $95,000 mortgage is 7.2% compounded semiannually. Monthly payments are based on a 25-year amortization. Suppose a $3,000 prepayment is made at the end of the third year. a. How much will the amortization period be shortened? b. What will be the principal balance at the end of the five-year term?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 15P

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