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Calculate the initial quarterly payment

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Reference no: EM132882630

Problem - A couple purchases a house and signs a mortgage contract for $270000 to be paid with quarterly payments over 15 years. The interest rate of the mortgage is j1 = 11% and can be renegotiated every 5 years without penalty. At the end of the 5 year they refinance the loan at j1 = 6%. Calculate the initial quarterly payment and the payment after the mortgage is refinanced. Also determine the value of the savings for the 2 & 5-year period with the new payment, and the outstanding balance of the mortgage at the end of 10 years.

Reference no: EM132882630

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