Adam Wilson just purchased a home and took out a $250,000 mortgage for 30 years at 8%, compounded monthly.
a. How much is Adam’s monthly mortgage payment?
b. How much sooner would Adam pay off his mortgage if he made an additional $100 payment each month?
c. Assume Adam makes his normal mortgage payments and at the end of five years, he refinances the balance of his loan at 6%. If he continues to make the same mortgage payments, how soon after the first five years will he pay off his mortgage?
d. How much interest will Adam pay in the tenth year of the loan
i. if he does not refinance?
ii. if he does refinance?