How much is the monthly payment of the mortgage

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Reference no: EM131180470

Eric just bought a house yesterday in Thunder Bay. The house was listed at $285,000 and Eric made a down payment of $50,000 and took out a 25-year mortgage to finance the purchase. The quoted interest rate is 5% and the first mortgage payment is in one month. (a) How much is the monthly payment of the mortgage? (b) How much is the total interest cost if Eric follows the monthly payment schedule to the end of the mortgage term? (c) Today, following a friend’s advice, John decides to switch to bi-weekly payments. What would be the bi-weekly payment? And how much interest can he save? (d) Instead of making bi-weekly payments, suppose Eric decides to prepay $5,000 at the end of the first year (the payment is made after the 12th monthly payment). How much interest will they save? (e) How much is the monthly payment if it is a US mortgage with the same principal amount, quoted rate and mortgage term? Note: You don’t need to print out the whole amortization table. Showing three lines of

Reference no: EM131180470

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