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View Full Version : Doubling up a mortgage (finance homework)


tgtony
Nov 14, 2012, 11:02 PM
A $200,000 mortgage amortized over 25 years with monthly payments at an interest rate of 6% compounded semi-annually. Suppose you made a double up payment every six months (in other words you make a payment that is double every six months) and at the end of each year you make a lump sum payment of $3,000. How long would it now take to pay off the mortgage (calculate the number of years). How much interest would be saved (when compared to the original mortgage).

I would like to know how to calculate this out, preferably using a financial calculator as that is what I am using, or just good ol' explanations.

Thanks!