Homework answers / question archive / Suppose you need to get a mortgage for $500,000

Suppose you need to get a mortgage for $500,000

Finance

Share With

Suppose you need to get a mortgage for $500,000. You would like a 17-year amortization period and plan on making quarterly payments. You find on the Internet the best mortgage rate of 4.2% (semi-annual compounding).

a) What will be the amount of your quarterly payment in that scenario?

b) How many years will it take you to pay off your mortgage if, instead of the quarterly payment amount calculated in part (a), you decide to make monthly payments of $3,200? The rest of the assumptions are the same as in part (a).

Step-by-step solution or excel with explanation.