A $100,000 Mortgage at 6

question 56

Short Answer

A $100,000 mortgage at 6.75% compounded semi-annually with a 20-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 ninth payment? (The interest that accrues during the ninth month is converted to principal at the end of the ninth month.)

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Definitions:

Method of Concomitant Variations

A principle in scientific and philosophic reasoning that suggests a causal relationship between two variables if they vary together consistently.

Method of Concomitant Variations

A scientific method where one observes the changes in one variable alongside the changes in another, determining correlation.

Sunlight

The light and energy that comes from the sun, providing warmth and facilitating photosynthesis in plants.

Method of Concomitant Variations

A research method where one observes the effects of the deliberate variation of one factor on a phenomenon to identify causation.