Anonymous asked in Business & FinanceOther - Business & Finance · 1 month ago

Accounting question?

Jack purchased a 250,000 home by putting 20 percent down and taking out a 25 yr mortgage with semi monthly payments of 600 to finance the rest . the payments will made at end of each period. What  was the quoted interest rate for the mortgage with semi annual compounding? Answer is 5.33

how to get this?

2 Answers

  • 1 month ago

    You start by getting an estimate % for the amount of the loan with a $1,200/mo payback then make an excel spreadsheet after you clarify some issues. Is semimonthly assumed to be 15 days and 15 days, or the exacting 15 days then 13, 14, 15, or 16 depending on the month ?  Also, does the bank post the exact day as revealed above?  What do you mean by semi-annual compounding ? {Seriously, that would be a oddity in the U S.}

  • 1 month ago

    It's a MATH question not an accounting question.  Repost to the right forum. 

Still have questions? Get your answers by asking now.