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Problems 4-6 are based on the following information: You just took a 25-year $400,000 mortgage with...

Problems 4-6 are based on the following information: You just took a 25-year $400,000 mortgage with a monthly interest rate of 0.5% (monthly compounding). Based on this information, you have determined that your monthly payments must be $2,564.38.

Problem 4: What will be your mortgage balance 7 years from now (right after you make your 84th payment) be?

Problem 5: By how many months will you reduce the length of your mortgage if you make a prepayment of $25,000 in exactly 10 years (in additional to your regular monthly payments of 2,564.38). Round your answer to the nearest month.

Problem 6: By how many months will you reduce the length of your mortgage if you were able to increase your monthly payments by $1000 (i.e., pay 3,564.38) for 4 years from your 61st to your 108th payment inclusive (and then go back to $2,564.38 monthly payments). Round your answer to the nearest month.

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jeff jeffy answered 1 year ago
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