Exam 14: Amortization of Loans, Including Residential Mortgages

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?

What is the monthly payment size of a 25-year mortgage for $100000 and an interest rate of 6% compounded semi-annually?

Andre has saved $152 000.00. If he withdraws $1750.00 at the beginning of every month and interest is 7.5% compounded monthly, what is the size of the last withdrawal?

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?

How much interest is paid in the 53rd monthly payment interval of a loan for $43200? The loan is amortized at a rate of 9.17% compounded annually over 7 years.

A demand (variable rate) mortgage of $137 000.00 is amortized over 20 years by equal monthly payments. After 21 months the original interest rate of 6% p.a was raised to 6.6% p.a. Three years after the mortgage was taken out, it was renewed at the request for the mortgagor for a five-year term at a fixed rate of 7.25% p.a. a) Calculate the mortgage balance after 21 months. b) Compute the size of the new monthly payment at the 6.6% rate of interest. c) Determine the mortgage balance at the end of the five-year term.

A $176 000.00 mortgage is to be repaid over a 21-year period by monthly payments rounded up to the next higher $100.00. Interest is 9.44% compounded semi-annually. a) Determine the number of rounded payments required to repay the mortgage. b) Determine the size of the last payment.

Sean and friends bought a property valued at $50000 for $5 000.00 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?

A mortgage balance of $137 960.70 is to be repaid over a eleven-year term by equal monthly payments at 8.1% compounded semi-annually. At the request of the mortgagor, the monthly payments were set at $1140.00. a) How many payments will the mortgagor have to make? b) What is the size of last payment? c) Determine the difference between the total actual amount paid and the total amount required to amortize the mortgage by the contractual monthly payments.

Barbara borrowed $12 000.00 from the bank at 9% compounded monthly. The loan is amortized with end-of-month payments over five years. a) Calculate the interest included in the 20th payment. b) Calculate the principal repaid in the 36th payment. c) Construct a partial amortization schedule showing the details of the first two payments, the 20th payment, the 36th payment, and the last two payments. d) Calculate the totals of amount paid, interest paid, and the principal repaid.

What is the outstanding balance after the 23rd payment interval of a 16-year loan for $14734 with semi-annual payments and an interest rate of 5.95% compounded quarterly?

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.

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?

Far East Imports Inc. owes $64 000.00 to be repaid by monthly payments of $2475.00. Interest is 6.12% compounded monthly. a) How many payments will Far East Imports Inc. have to make? b) How much interest is included in the 15th payment? c) How much of the principal will be repaid by the 17th payment? d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.

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?

A loan of $14 100.00 is amortized over 11 years by equal monthly payments at 5.4% compounded monthly. Construct an amortization schedule showing details of the first three payments, the fortieth payment, the last three payments, and totals.

What is the monthly payment size of a 21-year mortgage for $169600 and an interest rate of 7.2% compounded semi-annually?

Rola Inc. borrowed $42 000.00 at 7% compounded semi-annually. The loan is repaid by payments of $4700.00 due at the end of every six months. a) How many payments are needed? b) How much of the principal will be repaid by the 6th payment? c) Prepare a partial amortization schedule showing the details of the last three payments and totals.

How much interest is paid in total on a 3-year loan for $28600 (rounded to the nearest dollar)? The interest rate is 8.7% compounded monthly and the payments are monthly.

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?