Question

You want to pay off your mortgage on something called an accelerated bi-weekly payment plan (your parents told you to do this). You have a mortgage of $570,000 amortized over 32 years at a rate of 4.2 percent APR compounded semi-annually. (Assume 52 weeks a year.)

a. What would the regular bi-weekly payment be? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Regular bi-weekly payment           $

b. What would the accelerated bi-weekly payment be? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Accelerated bi-weekly payment           $

c. How much quicker would you pay off the mortgage payment? (Do not round your intermediate calculations. Round your answer to 3 decimal places.)

Pay off period             years

d. How much interest would you save by doing the accelerated bi-weekly payment? (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Savings in interest payment           $

Answer 1