The Walkers have a mortgage of 189000 amortized over 25 years at 6.7% compounded I biweekly with a 4-year term. The mortgage is renewed for another 4-year term at 8.9% compounded biweekly . Determine the new monthly payment.

## Step 1: Calculate the bi-weekly interest rate for the first term.<br />### The annual interest rate is 6.7%, and it is compounded biweekly (26 times a year). Therefore, the bi-weekly interest rate is $\frac{0.067}{26} \approx 0.0025769$.<br /><br />## Step 2: Calculate the number of payments in the first term.<br />### The first term is 4 years, and there are 26 bi-weekly payments per year. So, the total number of payments in the first term is $4 \times 26 = 104$.<br /><br />## Step 3: Calculate the bi-weekly payment for the first term.<br />### Using the formula for mortgage payment: $PMT = \frac{PV \times i}{1 - (1 + i)^{-n}}$, where $PV = 189000$, $i = 0.0025769$, and $n = 104 \times 25 = 2600$ (total payments over 25 years). $PMT = \frac{189000 \times 0.0025769}{1 - (1 + 0.0025769)^{-2600}} \approx 513.76$.<br /><br />## Step 4: Calculate the outstanding balance after the first term.<br />### The outstanding balance can be calculated using the formula: $B = PV(1+i)^n - PMT \frac{(1+i)^n - 1}{i}$, where $n=104$ (number of payments in the first term). $B = 189000(1+0.0025769)^{104} - 513.76 \frac{(1+0.0025769)^{104} - 1}{0.0025769} \approx 172095.76$.<br /><br />## Step 5: Calculate the bi-weekly interest rate for the second term.<br />### The annual interest rate for the second term is 8.9%, compounded biweekly. The bi-weekly interest rate is $\frac{0.089}{26} \approx 0.0034231$.<br /><br />## Step 6: Calculate the number of payments remaining after the first term.<br />### Since the amortization period is 25 years, and the first term is 4 years, there are $25 - 4 = 21$ years remaining. The number of bi-weekly payments remaining is $21 \times 26 = 546$.<br /><br />## Step 7: Calculate the bi-weekly payment for the second term.<br />### Using the mortgage payment formula with the new interest rate and remaining balance: $PMT = \frac{172095.76 \times 0.0034231}{1 - (1 + 0.0034231)^{-546}} \approx 572.91$.<br /><br />## Step 8: Calculate the new monthly payment.<br />### Since there are approximately 26 bi-weekly payments in a year, and 12 months in a year, the monthly payment is approximately $572.91 \times \frac{26}{12} \approx 1242.56$.