A $100,000 Mortgage at 7

question 36

Short Answer

A $100,000 mortgage at 7.3% compounded semi-annually with a 25-year amortization requires monthly payments. The mortgage allows the borrower to miss a payment once each year. How much will the amortization period be lengthened if the borrower misses the 12^th payment? (The interest that accrues during the 12^th month is converted to principal at the end of the 12^th month.)

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Definitions:

Merchandise

Goods that are bought and sold in business, often referred to in the context of retail, wholesale, or e-commerce.

Maturity Date

The specified date on which the final payment of a loan or financial instrument, such as a bond, is due and payable.

Notes Payable

Written promises to pay specified sums of money at future dates, categorized as liabilities.

Annual Interest

The amount of interest due over the course of a year on a loan or financial investment.