A $150,000 mortgage is amortized over 25 years. If interest on the mortgage is 3.5 percent compounded semi-annually, calculate the size of monthly payments made at the end of each month.
A. $784.91
B. $748.91
C. $734.91
D. $743.91
here n= 2, Number of months p = 6
Interest rate per month =(1+i/n)n/p-1 =
(1+3.5%/2)1/12-1 = 0.2896%
Monthly payments = PV/(1-(1+r)-n)/r =
150,000/((1-(1+0.2896%)-12*25)/0.2896% = 748.91
Option b is correct option
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