A Demand (Variable Rate) Mortgage of $137 000

question 34

Essay

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.

---

Definitions:

Time Management

The process of organizing and planning how to divide one's time between specific activities to increase efficiency and productivity.

Setting Priorities

The process of determining the most important tasks or goals to focus on, often to ensure efficient use of time and resources.

Grouping Tasks

The process of organizing tasks into categories or clusters for more efficient completion and to improve focus and productivity.

Found Her Niche

Refers to identifying an area or position that is very suitable for someone, often in a professional or personal context.