RSM332H1 Lecture Notes - The Monthly
Document Summary
Muhammad datoo wants to buy cottage in muskoka worth 1. 2m. He will make a down payment of 80,000 and finance the rest through a mortgage with pc financial. The mortgage rate is 7% pa, compounded semi-annually, so the effective monthly rate is 0. 575%. 5 years later, there is turmoil in the markets, and the bank changes the interest rates to 11%, so the monthly equivalent interest rate is. A year after the interest rates change, muhammad is wondering whether he can really afford a mortgage for a cottage in such uncertain times.