Question
April buys a $120,000 condo with an 20-year 3.75% interest-only loan. How much will she owe on the condo at the end of five years?
Answers
Reiny
explain what you mean by an "3.75% interest-only loan"
Interest loans on mortgages are usually stated as annual rates, compounded monthly,
since the common time for the payment period is the month.
Interest loans on mortgages are usually stated as annual rates, compounded monthly,
since the common time for the payment period is the month.
oobleck
If I am correct, an interest-only loan requires payments only of the accruing interest. So at the end of any time span, the balance owed is still the original $120K
Better review the topic to make sure this is so.
Better review the topic to make sure this is so.