The average price of a Mississauga home is $750, 000. In this assignment, we’ll take an idealized look at the return on investment for purchasing a home versus renting. We will ignore things like variability in interest rates, the housing market, and capital gains, but will still arrive at a reasonable estimate. Round your final answers to the nearest cent (two decimal places).
1. Determine the monthly payment required to amortize a $750, 000 mortgage over a 25 year period if you put a 20% down payment on your home, at an annual interest rate of 4.7% (the Canadian 5 year fixed-rate average) compounded monthly.
2. Determine the principal remaining in the loan after 5, 10, 15, 20, 25 years. Show the calculation for 5 years below, then fill in the provided table with the other values.