Suppose a loan of A dollars is amortized over n years at an annual interest rate r compounded monthly. Let i = r/12 be the equivalent monthly rate of interest. Then the monthly payments will be M dollars, where

a. Allison has a home mortgage of $250,000 at the fixed rate of 5.2% per year for 15 years. What are her monthly payments? How much totalinterest does she pay for this loan?

b. Nathan also has a mortgage of $250,000 but at the fixed rate of 5.6% per year for 30 years. What are his monthly payments? How much total interest does he pay?

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M(A, n, i) = 1 Ai (1 + i) -12n