Reference no: EM133147937

Question 1 - Ryan purchased a house for $350,000. He made a down payment of 25.00% of the value of the house and received a mortgage for the rest of the amount at 4.92% compounded semi-annually amortized over 15 years. The interest rate was fixed for a 7 year period.

a. Calculate the monthly payment amount.

b. Calculate the principal balance at the end of the 7 year term.

c. Calculate the monthly payment amount if the mortgage was renewed for another 7 years at 4.02% compounded semi-annually?

Question 2 - A $170,000 mortgage was amortized over 25 years by monthly repayments. The interest rate on the mortgage was fixed at 4.60% compounded semi-annually for the entire period.

a. Calculate the size of the payments rounded up to the next $100.

b. Using the payment from part a., calculate the size of the final payment.

Question 3 - A mortgage for a condominium had a principal balance of $47,300 that had to be amortized over the remaining period of 5 years. The interest rate was fixed at 4.22% compounded semi-annually and payments were made monthly.

a. Calculate the size of the payments.

b. If the monthly payments were set at $976, by how much would the time period of the mortgage shorten?

c. If the monthly payments were set at $976, calculate the size of the final payment.

Question 4 - Olivia planned to take a mortgage to purchase a house but could only afford to pay a maximum amount of $1,100 every month as mortgage payments. The variable open interest rate offered by her bank was 2.90% compounded semi-annually on mortgages amortized over 20 years. Calculate the maximum mortgage amount she will receive.