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Dave takes out a 23-year mortgage of 290000 dollars for his new house. Dave gets an...

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Finance

Dave takes out a 23-year mortgage of 290000 dollars for his newhouse. Dave gets an interest rate of 14.4 percent compoundedmonthly. He agrees to make equal monthly payments, the first comingin one month. After making the 70th payment, Dave wants to buy aboat, so he wants to refinance his house to reduce his monthlypayment by 400 dollars, and to get a better interest rate. Inparticular, he negotiates a new rate of 7.2 percent compoundedmonthly, and agrees to make equal monthly payments (each 400dollars less than his original payments) for as long as necessary,followed by a single smaller payment. WHAT WILL BE DAVE'S FINALPAYMENT AMOUNT BE?

Answer & Explanation Solved by verified expert
4.5 Ratings (644 Votes)
Loan Principle Amount 29000000 Annual Interest Rate 1440 120monthly Loan Period in months 27600 2312 Original Repayment Amount Pmt120276290000 361434 after 70 repayment the balance capital amount would be Repayment Number Opening Balance Loan Repayment Interest Charged Capital Repaid Closing Balance 1 29000000 361434 348000 13434 28986566 2 28986566 361434    See Answer
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