Math Problem Statement
This problem is a complex financial problem that requires several skills, perhaps some from previous sections.
Clark and Lana take a 30-year home mortgage of $123,000 at 7.9%, compounded monthly. They make their regular monthly payments for 5 years, then decide to pay $1200 per month.
(a) Find their regular monthly payment. (Round your answer to the nearest cent.) $ _____
(b) Find the unpaid balance when they begin paying the $1200. (Round your answer to the nearest cent.) $ ____
(c) How many payments of $1200 will it take to pay off the loan? Give the answer correct to two decimal places. ____ monthly payments
(d) Use your answer to part (c) to find how much interest they save by paying the loan this way. (Round your answer to the nearest cent.) $ ____
Solution
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Math Problem Analysis
Mathematical Concepts
Finance
Compound Interest
Mortgages
Formulas
Monthly Payment Formula for Mortgage
Remaining Balance Formula for Mortgage
Theorems
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Suitable Grade Level
Advanced High School
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