A young couple has made monthly payments (of equal size, rounded to the nearest cent) over the past 10 years on a 15-year mortgage of $64,000 with Banco Popular. The stated annual rate on the mortgage is 5%, compounded semi-annually. They are going to renegotiate their mortgage so that they can pay off their loan over the next 10 years at a higher rate of 7% per year compounded semi- annually. The first payment at the new rate will be made at the end of the current month following the renegotiation. What will be the size of their new payment?

A young couple has made monthly payments (of equal size, rounded to the nearest cent) over the past 10 years on a 15-year mortgage of $64,000 with Banco Popular. The stated annual rate on the mortgage is 5%, compounded semi-annually. They are going to renegotiate their mortgage so that they can pay off their loan over the next 10 years at a higher rate of 7% per year compounded semi- annually. The first payment at the new rate will be made at the end of the current month following the renegotiation. What will be the size of their new payment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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