Ivanthedumbfck
New member
- Joined
- Oct 7, 2014
- Messages
- 23
i need some help with this question:
Pelican Recreational Services owe $27,500 secured by a collateral mortgage. The mortgage is amortized over 15 years by equal payments made at the end of every 3 months and is renewable after 3 years.
If the mortgage is renewed for a further 4 years but amortized over 8 years and interest is 7.5% compounded semi-annually, what is the size of the quarterly payments for the renewal period?
Here's what i did:
N=4x4=16
I=0.075/2=0.0375
C=2/4=1/2
P=(1+0.0375)^1/2-1=0.018577439
PV= PMT[1-(1+P)^-n]/P
27500= PMT[1-(1+0.018577439)^-16]/0.018577439
27500=PMT(13.73196962)
PMT=$2002.63
The correct answer is $1000.87
1
Pelican Recreational Services owe $27,500 secured by a collateral mortgage. The mortgage is amortized over 15 years by equal payments made at the end of every 3 months and is renewable after 3 years.
If the mortgage is renewed for a further 4 years but amortized over 8 years and interest is 7.5% compounded semi-annually, what is the size of the quarterly payments for the renewal period?
Here's what i did:
N=4x4=16
I=0.075/2=0.0375
C=2/4=1/2
P=(1+0.0375)^1/2-1=0.018577439
PV= PMT[1-(1+P)^-n]/P
27500= PMT[1-(1+0.018577439)^-16]/0.018577439
27500=PMT(13.73196962)
PMT=$2002.63
The correct answer is $1000.87
1