Canadian laws to compound the interest semi-annually

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Suppose your parents wish to buy a house whose current market value is $120,000. They have approached a loan officer at the Bank of Aeroland who offers them 20-year mortgage financing for 75% of the purchase price at an annual rate of 0.75%. Payments are to be made on a monthly basis even though the bank is required by Canadian laws to compound the interest semi-annually.

Reference no: EM133674492

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