A $40,000 mortgage loan charges interest at 6.6% compounded monthly for a four-year term. Monthly payments were calculated for a 15-year amortization and then rounded up to the next higher $10.
a. What will be the principal balance at the end of the first term?
b. What will be the monthly payments on renewal for a three-year term if they are calculated for an interest rate of 7.2% compounded monthly and an 11-year amortization period, but again rounded to the next higher $10?