A $100,000 Mortgage at 6

question 55

Short Answer

A $100,000 mortgage at 6.9% compounded semi-annually with a 20-year amortization requires monthly payments. The mortgage allows the borrower to increase the regular payment by up to 10% once each year. How much will the amortization period be shortened if payments are increased by 10% after the 12^th payment, and by another 10% after Payment 24?

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Definitions:

Interaction Effect

Occurs when the effect of one independent variable on a dependent variable changes across the levels of another independent variable.

Crime Area

A geographical location with a measurable level of criminal activity or events.

Main Effects

The immediate impact that an independent variable has on a dependent variable within an experimental research setting.