A $100,000 mortgage at 4.9% compounded semiannually with a 30-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 12th payment, and by another 10% after Payment 24?
A $100,000 mortgage at 4.9% compounded semiannually with a 30-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 12th payment, and by another 10% after Payment 24?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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A $100,000 mortgage at 4.9% compounded semiannually with a 30-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 12th payment, and by another 10% after Payment 24?
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