Jordan and Mike are both planning on attending university in Calgary. Jordan's parents rent him a one bedroom apartment for $750 per month. Mike's parents bought a 3 bedroom house for $285000 that required a down payment of 10% and offered a mortgage amortized over 20 years at an annual rate of 4.15% compounded semi-annually for a 5 year term. They rented the other two rooms out for $600 each per month. The house depreciated in value by 1.5% and the cost of taxes and maintenance averaged $3000 a month. 

a) How much did Jordan's parents pay in rent over 5 years? 
- $45,000 

b) What were the monthly mortgage payments on Mike's parents house? 
- N= 240 I%=4.15 PV=256,000 PMT= -1569.88 FV=0 P/Y=12 C/Y=2 
****Is this correct? 

c) How much was left to pay on the mortgage after 5 years? (use your financial application to fill in the appropriate inputs) 

d) How much had the house lose value over the 5 years? 

e)Assuming the house was sold at market value after 5 years, How much would Mikes parents receive from the sale? 

f) How much did Mike's parents have to subsidize the rent for the 5 years term? 

These last 4 I'm having trouble with, I have never done a mortgage question before and I'm at a total loss.....Can someone please help explain it a little better and help me set up the question??? 

Thanks in Advance

 Oct 13, 2017

Do an amortization schedule such as this one and you can get most of your answers from it:


 Oct 13, 2017

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