SOLUTION: Austin paid $134,200 as a down payment towards an apartment purchase and received a mortgage from a bank for the remaining amount; he is to pay $5,660 at the end of every three mon
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Question 1193350: Austin paid $134,200 as a down payment towards an apartment purchase and received a mortgage from a bank for the remaining amount; he is to pay $5,660 at the end of every three months for 29 years at an interest rate of 2.46% compounded quarterly to repay the mortgage.
a) What was the purchase price of the apartment? $
b) What was the total amount Austin paid over the 29-year period to repay the mortgage? $
c) How much interest was charged on the mortgage? $ Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website! he paid 134,200 down payment and received a mortgage from a bank for the remaining amount.
he will pay 5660 at the end of each quarter (3 months is a quarter of a year) for 29 years at an interest rate of 2.46% per year compounded quarterly.
the length of the loan is 29 years * 4 quarters per year = 116 quarters.
the interest rate per quarter is 2.46% / 4 = .616%.
total amount he paid over the 29 year period is 5660 * 116 = 656,560
the present value of the payments = 468,402.19
total interest he paid is 656,560 minus 468,402.19 = 188,157.81.
