Question: You purchased a new house for $750,000. You were required to pay 30 percent as down payment and you obtained the rest from HSBC bank as a loan to be repaid over the next 15 years in monthly payments. You will be charged an annual interest rate of 9 percent on the loan.
a. Determine the value of each monthly payment.
b. Determine the amount of interest charges included on the 96th payment.
c. Assume that after paying for 10 years, the interest rate on the loan falls to 6 percent and you decided to pay in full the remaining balance with no penalties imposed by the bank.Determine the amount you have to pay in one lump sum to pay off the entire loan.