(1) Nicole has some student loan debt and credit card debt, in addition to her mortgage. On the day she comes to see you, she has the following circumstances: Her current outstanding balance on her mortgage is $241,000, and her current mortgage loan is at 5.125% compounded monthly. When she originally took out this mortgage, it was a 30-year loan. She has 301 payments to go on this loan, if she stays the course. What is Nicoles monthly mortgage payment? ______________

Currently, her loan balance for student loans is $35,000, and the rate is 7.875% compounded monthly. Her current trajectory is that she is paying $1000 per month on these student loans, and she plans to continue doing this until they are paid off. How long will it take Nicole to pay off these student loans, with this plan? _________________

Finally, Nicole has $12,000 of credit card debt, at a rate of 22% compounded monthly. As with the student loans, she is currently paying $1000 per month to bring this debt to zero, and she is planning to continue this until she is done. How long will it take Nicole to pay off this credit card, with this plan? __________________ SUMMARY: How much, in total, will Nicole pay back over the coming years in order to bring these three debts to zero in this way? _____________________

(2) Nicole shares some good news with you (at least she thinks it is good news). Due to her very good credit rating and the increased value of her home, a new mortgage broker tells her that she can take out a 20 year mortgage today at 3.99% compounded monthly, for the amount of all three of her current balances. (So the new 20- year mortgage will be for $288,000 = 241,000+35,000+12,000.) This way, she will be able to pay off her student loans, credit cards, and current mortgage immediately. Then she will only have one monthly payment on the new mortgage, and she can pay this new mortgage off over 20 years. What will her new monthly payment be? How does this compare to the three monthly payments she is currently making? _________________

SUMMARY: How much, in total, will Nicole pay back over the coming 20 years, in order to bring her debts to zero? Is her news truly good news? Explain.