Exam 14: Amortization of Loans, Residential Mortgages, and Sinking Funds

The owner of the Guelph Inc. borrowed $20 000.00 at 1.2% compounded semi-annually and agreed to repay the loan by making payments of $1000.00 at the end of every three months. a)How many payments will be needed to repay the loan? b)How much will be owed at the end of five years?

A $180 000.00 mortgage is to be amortized by making monthly payments for 22.5 years. Interest is 7.2% compounded semi-annually for a four-year term. a)Compute the size of the monthly payment. b)Determine the balance at the end of the four-year term. c)If the mortgage is renewed for a five-year term at 8.66% compounded semi-annually, what is the size of the monthly payment for the renewal term?

What is the monthly payment size of a 25-year mortgage for $100 000 and an interest rate of 6% compounded semi-annually?

A debt of $42 500.00 is repaid by payments of $4850.00 made at the end of each year. Interest is 7% compounded semi-annually. a)How many payments are needed to repay the debt? b)What is the cost of the debt for the first three years? c)What is the principal repaid in the 3rd year? d)Construct an amortization schedule showing details of the first three payments, the last three payments, and totals.

A debt of $43 100.00 is repaid by payments of $3350.00 made at the end of every six months. Interest is 8.4% compounded quarterly. a)What is the number of payments needed to retire the debt? b)What is the cost of the debt for the first five years? c)What is the interest paid in the 11th payment? d)Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.

Amanda borrowed $57 800 from BMO to buy a 2014 E-Class Mercedes Sedan at 3.9% compounded monthly. Payments of $2056 are required at the end of every month. Construct a complete amortization schedule in MS Excel showing the details of all payments and the total.

How much total principal is repaid between the 1st and 7th payment interval of a 4.5-year loan for $4887 at an interest rate of 7.4% compounded monthly and the payments are also monthly. Round your answer to the nearest dollar.

The owner of the Pink Flamingo Motel borrowed $19 500.00 at 8.11% compounded semi-annually and agreed to repay the loan by making payments of $1110.00 at the end of every three months. a)How many payments will be needed to repay the loan? b)How much will be owed at the end of five years? c)How much of the payments made at the end of five years will be interest?

How much interest is paid in the 53rd monthly payment interval of a loan for $43 200? The loan is amortized at a rate of 9.17% compounded annually over 7 years.

What is the outstanding balance after 23 payments on a 20-year mortgage that has monthly payments of $1062.32 and an interest rate of 6.6% compounded monthly?

A loan of $10 000.00 is repaid by quarterly payments of $1000.00 each at 12% compounded quarterly. What is the principal repaid by the 11th payment?

Karen receives pension payments of $4570.00 at the end of every six months from a retirement fund of $82 000.00. The fund earns 8.06% compounded semi-annually. a)How many payments will Karen receive? b)What is the size of the final pension payment?

Munawar is a first time buyer and bought a brand new townhouse in Oshawa for $212 000. He has saved enough to make a 5% down payment and will have to pay mortgage loan insurance at 2.75% of the mortgage balance. Munawar wants the insurance premium added to the maximum allowable loan balance. Determine his maximum initial mortgage balance.

A contract valued at $47 500.00 requires payments of $6951.00 every six months. The first payment is due in four years and interest is 6.6% compounded semi-annually. a)How many payments are required? b)What is the size of the last payment? c)How much will be paid in total? d)How much of what is paid is interest?

What is the size of the final unequal payment of a loan for $2723.44 if it has quarterly payments of $500? The interest rate is 8.4% compounded quarterly.

A $151 000.00 mortgage is to be repaid over a 17-year period by monthly payments rounded up to the next higher $50.00. Interest is 8.2% compounded semi-annually. a)Determine the number of rounded payments required to repay the mortgage. b)Determine the size of the last payment. c)Calculate the amount of interest saved by rounding the payments up to the next higher $50.00.

Tariq bought a commercial property valued at $130 000 for $26 000.00 down and a mortgage amortized over 25 years. He makes equal payments due at the end of every month. Interest on the mortgage is 4.1% compounded semi-annually and the mortgage is renewable after five years. What is the cost of the mortgage for the first five years?

Kirk had accumulated $975 000 in his RRSP at the age of 55. He converted the RRSP into an RRIF at that time and started withdrawing $5000 at the beginning of each month. If interest is 4.5% compounded monthly, what is the size of his final withdrawal?

What is the outstanding balance after the 23rd payment interval of a 16-year loan for $14 734 with semi-annual payments and an interest rate of 5.95% compounded quarterly?

What is the size of the final unequal payment of a loan that has 69.47 payments and the equal payment size is $215.64? The interest rate is 3.1% per compounding period.