The value of her investment will be $89 466.86.
|
Year
|
Value of the Investment
($)
|
|
0
|
20 000.00
|
|
1
|
23 100.00
|
|
2
|
26 370.50
|
|
M
|
M
|
|
15
|
89 466.86
|
The value of her investment will be $89 466.86.
The total amount of interest earned will be $39 466.86.
The total amount of interest earned will be $39 466.86.
Sylvie and Roland want to purchase a new house and can afford to make monthly payments of $1000.00. They go to the bank and obtain a mortgage for $195 000.00 compounded semi-annually and amortized over 25 years.
What is the interest rate (to 2 decimal places) of the mortgage? Show your work.
Sylvie and Roland wonder if it would be wise to find a less expensive house to reduce the amortization period to 20 years. Assuming that only the amortization period changes, what would be the maximum mortgage they could afford? Show your work.