Five years ago, the Staples signed a closed fixed rate mortgage with a 25-year amortization...
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Five years ago, the Staples signed a closed fixed rate mortgage with a 25-year amortization and monthly payments. They negotiated an interest rate of 4.49% compounded semi-annually. The terms of the mortgage allow for the Staples to make a single top-up payment at any one point throughout the term. The mortgage principal was $179,000 and they made one top-up payment of $10,000 three years into the term. They are renewing the mortgage today for another five-year term but have reduced the amortization period by five years. a. What is the balance remaining at the end of the first term? b. By what amount was the interest portion of the first term reduced by making the top-up payment? c. Calculate the mortgage payment amount for the second term if the interest rate remains unchanged.
You MUST use the TI BA II calculator features (N, I/Y, PV, PMT, FV, AMORT) to solve questions whenever possible.
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