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A family bought a house in October 1998 for $200,000. The house was financed by a mortgage where they paid 20% of the value and the bank financed the balance of the loan at 9% annual interest compounded monthly [.0075% monthly] over a 15-year period [180 payments]. After paying after paying 80 payments, the family decided to pay the balance due in a lump sum when the 81st paymenr becomes due.

A. How much did they have to pay?

B. If the bank agreed to lower the interest rate to 6% interest applied to the balance due, how much would the new payment be?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9498637

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