Orick P.

asked • 04/07/21

Macroeconomics help

A​ variable-rate mortgage of ​$140,000 is amortized over 20 years by equal monthly payments. After 12 months the original interest rate of 8​% compounded semi-annually was raised to 8.8​% compounded semi-annually. Three years after the mortgage was taken​ out, it was renewed at the request of the mortgagor at a fixed rate of 8.6​% compounded semi-annually for a​ four-year term.

​(a) Calculate the mortgage balance after 12 months.

​(b) Compute the size of the new monthly payment at the 8.8​% rate of interest.

(c) Determine the mortgage balance at the end of the​ four-year term.


1 Expert Answer

By:

Laura M. answered • 04/11/21

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