question archive A $100,000 mortgage with a 25-year term is repaid by making payments at the end of every month
A $100,000 mortgage with a 25-year term is repaid by making payments at the end of every month
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A $100,000 mortgage with a 25-year term is repaid by making payments at the end of every month. If interest is 3% compounded semi-annually, how much are the payments?
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$473.25
P = mortgage amount = 100,000
n = number of periods = 25 x 12 = 300
r = periodic rate = (1 + (0.03/2))2/12 - 1 = 0.002484516725
C = periodic cash flow
P = C x (1-(1+r)-n) / r
100,000 = C x (1-(1+0.002484516725)-300) / 0.002484516725
C = 100,000 / 211.3068171
C = 473.25
