The Interest Rate for the First Three Years of an $163,000

question 181

Short Answer

The interest rate for the first three years of an $163,000 mortgage is 5.4% compounded semi-annually. Monthly payments are based on a 20-year amortization. If a $4,000 prepayment is made at the end of the 16^th month:
a) How much will the amortization period be shortened?
b) What will be the principal balance at the end of the three-year term?

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