Question 13 (of 20) value 10.00 points A mortgage broker is offering a s271,000

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Question 13 (of 20) value 10.00 points A mortgage broker is offering a s271,000 30-year mortgage with a teaser rate, In the first two years of the mortgage, the borrower makes monthly payments on only a 3.7 percent APR interest rate. Afer the second year, the mortgage interest rate charged increases to 6.7 percent APR What are the monthly payments in the fist two years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Monthly payment What are the monthly payments after the second year? (Round the dollar amounts to the nearest cent but do not round other values in your interim calculations. Round your final answer to 2 decimal places.) Monthly payment References eBook & Resources Worksheet oiiculity 3 Advanced

Explanation / Answer

Here we willl use excel formula to find out the present value and future value of annuity

here formula for future value = FV(rate,nper,pmt)

here rate = 9.75%/12 (since payment is monthly)

nper = 5*12 = 60 months

pmt = -210(monthly payment is cash outlfow)

so future value FV= FV(9.75%/12,60,-210) = $16,154.79

Same way

Present Value PV = PV(rate,nper,PMT) = PV(9.75%/12,60,-210) = $9,941.18

Thanks

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