# Math - Personal Finance

Ina is negotiating a mortgage of \$145 000 for her new house. Determine Ina's monthly payments for a mortgage at 5% annum, compounded semi-annually, amortized over 25 years. How much will Ina pay over the 25 years to pay off this mortgage?

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1. To use the formula for a series of payments, such as carpayments, and mortgages, the period of compounding and the period of payments must be the same.
Yours has the interest compounded semi-annually, and the payments are monthly, which does not match up
So we have to find the monthly rate equalent to a rate of 5% per annum compounded semi-annually

let the monthly rate be i , then
(1+i)^6 = 1.025
1+i = 1.025^(1/6) = 1.004123915
i = .0041239... ----- I stored that in my calculator

let the payment be P

P(1 - 1.0041239..^-300)/.0041239... = 145000
...
P = \$843.33

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posted by Reiny

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