What was the maximum amount could afford to pay for a house

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Problem 1: Maria planned to buy a house but could afford to pay only $8,500 at the end of every 6 months for a mortgage with an interest rate of 4.50% compounded semi-annually for 20 years. He paid $29,500 as a down payment.

a. What was the maximum amount he could afford to pay for a house?

b. What was his total investment through the mortgage period (not taking the time-value of money into account)?

c. What was the total amount of interest paid through the mortgage period?

Problem 2: Mary invested $80 at the end of every month into an RRSP for 3 years. If the RRSP was growing at 4.80% compounded quarterly, how much did he have in the RRSP at the end of the 3-year period?

Reference no: EM132678629

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