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2. You take out a home loan of $500 000, which will be repaid in 40 level payments at the end of each six-month period, start

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Answer #1
Loan Amount          500,000
Number of Payments N 40 bi-annual payment
Anuual Int rate 5%
Repayment Amounts    19,918.117 =-PMT(Annual Rate/2,N,Loan Amount) Answer a
=-PMT(5%/2,40,500000)
Annual Rate 5%
Monthly rate 0.417%
Annualized Rate 5.116%
Repayment Amounts    20,113.482 =-PMT(Annual Rate/2,N,Loan Amount) Answer b
=-PMT(5.116%/2,40,500000)
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