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Determine joe monthly mortgage payment

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Joe Normson has gone to his local bank and has been approved for a mortgage at the bank's quoted annual (stated) interest rate of 6%, with semi-annual compounding. Joe wishes to purchase a home for $555,000, with a down payment of $125,000, for an initial term of five years. Joe plans to make monthly payments on his mortgage.

Problem a) Effective annual rate of interest and the effective monthly rate of interest associated with Joe's mortgage.

Problem b) Using a five-year term and a 25-year amortization period, determine Joe's monthly mortgage payment.

Problem c) Determine the amount of principal owing on Joe's mortgage after the initial five-year term has elapsed.

Reference no: EM132787077

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