An interest-only mortgage is made for $112,000 at 4.5 percent annual interest for 10 years. The lender and borrower agree that monthly payments will be constant and will require no loan amortization. a. What will the monthly payments be? b. What will be the loan balance after four years? c. If the loan is repaid after four years, what will be the
An interest-only mortgage is made for $112,000 at 4.5 percent annual
interest for 10 years. The lender and borrower agree that monthly payments
will be constant and will require no loan amortization.
a. What will the monthly payments be?
b. What will be the loan balance after four years?
c. If the loan is repaid after four years, what will be the yield to the
lender?
d. Instead of being repaid after four years, what will be the yield if the
loan is repaid after 10 years?