The interest rate for the first three years of an $87,500 mortgage is 4.4% compounded semiannually. Monthly payments are based on a 20-year amortization. If a $4,200 prepayment is made at the end of the sixteenth month. a. How much will the amortization period be shortened? The amortization period will be shortened by months, b. What will be the principal balance at the end of the three-year term? (Round your answer to the nearest cent.)
The interest rate for the first three years of an $87,500 mortgage is 4.4% compounded semiannually. Monthly payments are based on a 20-year amortization. If a $4,200 prepayment is made at the end of the sixteenth month. a. How much will the amortization period be shortened? The amortization period will be shortened by months, b. What will be the principal balance at the end of the three-year term? (Round your answer to the nearest cent.)
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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