Duguid and Partners Bought a Property Valued at $87 300

question 23

Essay

Duguid and Partners bought a property valued at $87 300.00 for $17 000.00 down and a mortgage amortized over 17 years. The firm makes equal payments due at the end of every three months. Interest on the mortgage is 6.85% compounded annually and the mortgage is renewable after five years.
a) What is the size of each quarterly payment?
b) What is the outstanding principal at the end of the five-year term?
c) What is the cost of the mortgage for the first five years?
d) If the mortgage is renewed for a further five years at 7.17% compounded semi-annually, what will be the size of each quarterly payment?

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Definitions:

Positive Terminal

The electrode in an electrical device from which current flows away, typically marked with a positive sign and higher potential energy.

Anode

The positive terminal of an electric device.

Magnesium Atom

The atomic form of magnesium, a light, silvery-white, moderately hard metallic element that is an essential nutrient for living cells.

Metallic Salt

Chemical compounds consisting of metal cations and non-metal anions, often soluble in water and can conduct electricity when molten or dissolved.