11.5% compounded monthly. The Wilson's purchased a home for 350000 The put 25% down and took out a mortgage for the rest. The mortgage had an interest rate ate of 13.5% compounded of 13.5% biweekly for an amortization period of 20 years . At the end of their 7-year term, the Wilsons renewed their mortgage at 8.25% compounded biweekly for a 5-year term and then renewed their mortgage again at 9.3% compounded biweekly for the remaining 8 years. a) What was the monthly payment during the 7-year term? b) What was the monthly payment during the 5-year term? b) What was the monthly payment during the 8-year term? d) How much interest did the Wilsons pay over the 20 years?

## Step 1: Calculate the Mortgage Principal### The Wilsons put down 25% of 0.25 \times 350000 = \ . The mortgage principal is the purchase price minus the down payment: 262500 \frac{0.135}{26} = 0.0051923 7 \times 26 = 182 P = \frac{rPV}{1-(1+r)^{-n}} P = \frac{0.0051923 \times 262500}{1 - (1 + 0.0051923)^{-182}} = \ . The monthly payment is 4065.97 B = PV(1+r)^n - P\frac{(1+r)^n - 1}{r} B = 262500(1+0.0051923)^{182} - 1878.73\frac{(1+0.0051923)^{182}-1}{0.0051923} \approx \ . The new interest rate is 8.25% compounded biweekly, so the biweekly rate is . The number of biweekly payments in 5 years is . The biweekly payment is 1934.40 1934.40 \times \frac{26}{12} \approx \ .## Step 4: Calculate the Monthly Payment for the 8-Year Term### The outstanding balance after the 5-year term is 151436.05 \frac{0.093}{26} = 0.003577 8 \times 26 = 208 P = \frac{0.003577 \times 151436.05}{1 - (1 + 0.003577)^{-208}} = \ . The monthly payment is 2180.63 1878.73 \times 182 = \ . Total amount paid during the 5-year term: 251472 1006.79 \times 208 = \ . Total amount paid: 803089.18 803089.18 - 262500 = \ .