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Determine Joes monthly mortgage payment

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Question - 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.

Required -

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

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

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

Reference no: EM132821509

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