Calculate the maximum mortgage amount she will receive

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Reference no: EM133633825

Question 1: A mortgage for a condominium had a principal balance of $43,700 that had to be amortized over the remaining period of 7 years. The interest rate was fixed at 4.62% compounded semi-annually and payments were made monthly.

a. Calculate the size of the payments.

b. If the monthly payments were set at $709, by how much would the time period of the mortgage shorten?

year(s)

months

c. If the monthly payments were set at $709, calculate the size of the final payment.

Question 2: Edward planned to take a mortgage to purchase a house but could only afford to pay a maximum amount of $1,800 every month as mortgage payments. The variable open interest rate offered by her bank was 4.70% compounded semi-annually on mortgages amortized over 20 years. Calculate the maximum mortgage amount she will receive.

Reference no: EM133633825

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