Find the original amount of the mortgage loan

Reference no: EM131095085

1. A mortgage loan is repaid with annual installment payments payable at the end of each year for 30 years. Each subsequent payment is 2% higher than the previous one. The interest rate charged on the loan balance is:

10% in the years 6k + 1,
9% in the years 6k + 2,
7% in the years 6k + 3,
8% in the years 6k + 4,
7.5% in the years 6k + 5,
8.5% in the years 6k + 6,

where k = 0, 1, 2, 3, 4. The principal repaid in the 28-th installment is 33,990. Find the original amount of the mortgage loan.

2. Steve took a loan of $10,000 at the annual effective interest rate is 7.5%. He wishes to pay the loan back in full at the end of the 10 years with the balance of a sinking fund created specifically for that purpose. He makes the interest payments at the end of the every year. At the time of each interest payment he also makes a payment to the sinking fund, which earn 5% annual effective interest rate. The first payment to the sinking fund is X and every payment will increase by 10 from the previous payment. Calculate X.

Reference no: EM131095085

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