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

Rebecca bought a house in Oshawa and took a $259 000 mortgage amortized by monthly payments over 25 years that is renewable after 5 years. If interest is 4.4% compounded semi-annually, what is the outstanding balance at the end of the five year term? If the mortgage is renewed for a further 5 year term at 3.7% compounded semi-annually, what is the balance after the second 5 year term?

A contractor's price for a new building was $85 100.00. Stampede Inc., the buyers of the building, paid $14 000.00 down and financed the balance by making equal payments at the end of every six months for 14 years. Interest is 12% compounded semi-annually. a)What is the size of the semi-annual payment? b)How much will Stampede Inc. owe after 6 years? c)What is the total cost of the building for Stampede Inc.? d)What is the total interest included in the payments?

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?

Payments of $1000.00 deferred for nine years are received at the end of each month from a fund of $20 000.00 deposited today at 6% compounded monthly. Calculate the size of the final payment.

A contract worth $59 000.00 provides benefits of $21 000.00 at the end of each year. The benefits are deferred for six years and interest is 8.95% compounded quarterly. a)How many payments are to be made under the contract? b)What is the size of the last benefit payment?

Honda is selling a 2014 Accord Coupe Ex M for $30 056.90 including freight, PDI and all applicable fees. The lease payment of $382 is due at the beginning of each month. If the interest rate compounded annually is 3.99% and the residual value is $13 200, determine the size of the final lease payment.

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 $40 000.00 is repaid in monthly installments of $500.00. If interest is 8.0% compounded quarterly, what is the size of the final payment?

The Taylors agreed to monthly payments rounded up to the nearest $100.00 on a mortgage of $136 000.00 amortized over 15 years. Interest for the first five years was 8.5% compounded semi-annually. After 30 months, as permitted by the mortgage agreement, the Taylors increased the rounded monthly payment by 10%. a)Determine the mortgage balance at the end of the five-year term. b)If the interest rate remains unchanged over the remaining term, how many more of the increased payments will amortize the mortgage balance? c)How much did the Taylors save by exercising the increase-in-payment option?

John makes a monthly mortgage payment of $1940 at the end of every month. On October 31, his loan balance was $145 000 after making a payment of $1940. His financial institute allows him to make one additional payment equal to or less than his monthly payment, once a month. Taking advantage of that, John made a payment of $1500 on November 15 and $1900 on December 20. What is his year-end balance after making monthly payment on December 31? The effective monthly fixed rate is 0.306%.

Payments of $1000.00 deferred for nine years are received at the end of each month from a fund of $20 000.00 deposited today at 6% compounded monthly. Calculate the size of the final payment.

How much total interest is paid between the 6th and 13th payments on a loan that has monthly payments for 3 years and an original principal of $14 750? The loan rate is 6.6% compounded quarterly.

How much interest is paid after the first payment interval on a $100 000 mortgage? The mortgage is amortized over 25 years and the payments are monthly. The interest rate is 6% compounded semi-annually. Round your answer to the nearest dollar.

Duguid and Partners bought a property valued at $87 300.00 for $17 000.00 down and a mortgage amortized over 17 years. The firm makes equal payments due at the end of every three months. Interest on the mortgage is 6.85% compounded annually and the mortgage is renewable after five years. a)What is the size of each quarterly payment? b)What is the outstanding principal at the end of the five-year term? c)What is the cost of the mortgage for the first five years? d)If the mortgage is renewed for a further five years at 7.17% compounded semi-annually, what will be the size of each quarterly payment?

Samuel paid $850 000.00 for a new house. He paid $140 000.00 down and financed the balance by making equal payments at the end of every month for 25 years. Interest is 5.1% compounded monthly. What is the total cost of the building for Samuel?

Rebecca borrowed $20 400 from her local credit union to pay for the upgrades in her kitchen. She wants to pay the loan with monthly payments over a period of 3 years. What is the interest included in the tenth payment, if the rate charged by the credit union is 6% monthly?

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?

Sean and friends bought a property valued at $50 000 for $5000.00 down and a mortgage amortized over 10 years. The group makes equal payments due at the end of every three months. Interest on the mortgage is 6.00% compounded annually and the mortgage is renewable after five years. a)What is the size of each quarterly payment? b)What is the outstanding principal at the end of the five-year term? c)What is the cost of the mortgage for the first five years? d)If the mortgage is renewed for a further five years at 9% compounded semi-annually, what will be the size of each quarterly payment?

Tom receives pension payments of $6000.00 at the end of every six months from a retirement fund of $90 000.00. The fund earns 8.00% compounded semi-annually. a)How many payments will Tom receive? b)What is the size of the final pension payment?

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.