(SOLVED) Amanda's mortgage is repaid over 20 years by payments of $577.53 made at the end of each month.

Discipline: Finance

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 1-2)

Paper Format: APA

Pages: 1 Words: 110

Question

Amanda's mortgage is repaid over 20 years by payments of $577.53 made at the end of each month.


If interest 2% semi annually, what is the mortgage principal?


Expert Solution Preview


Interest rate = 2% compounded semi-annually


Interest rate = 0.02


S = Number of semi-annual periods per year = 2


Q = Number of months in a semi-annual period = 6


The effective monthly rate is given by: