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What is your bi-weekly mortgage payment

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Question - After graduating with your degree, you have decided that it is time to buy your first home. The condo you want costs $400,000 and you have $50,000 for a down payment. The bank will lend you $350,000 at a rate of 6%, compounded semi-annually, and amortized over 25 years.

If you were to decide that bi-weekly payments (bi-weekly means you pay once every two weeks or 26 payments per year) better fitted your cash flow than monthly payments, based on the same numbers used above (principal of $350,000, 6% interest rate, compounded twice a year and amortized over 25 years), what is your bi-weekly mortgage payment?

a. $1,611.29

b. $977.40

c. $1,032.16

d. $1,040.94

Reference no: EM132614638

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