Chat with us, powered by LiveChat You want to buy an apartment in Versailles, which costs 700,000 euros. You can put 300,000 euros down, and for the rest you get a 20-year fixed rate... - STUDENT SOLUTION USA

You want to buy an apartment in Versailles, which costs 700,000
euros. You can put 300,000 euros down, and for the rest you get a 20-year
fixed rate mortgage from your bank. The annual percentage rate is 5% per
year, compounded monthly. How big is your monthly payment? You assume
that there are no other taxes and fees involved. Solution:
Denote the unknown monthly payment amount by
C. You are liable an annuity with monthly cash flows C, and you know that the fair value
is 400,000 Euros. There are
T= 240 monthly cash flows… Denote the unknown monthly payment amount by C. You are liable an annuity with monthly cash flows C, and you know that… View the full answer

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