2.7-5. When we make monthly payments on a car or a house, the amount of the payment is a constant, but different fractions of this payment represent repayment of the principal and the interest. Also, the fraction allocated to each changes over the loan period. Using the terminology below, develop expressions for the principal and interest payments during year y: M = amount of mortgage p= monthly payment R = nominal interest rate P= annual payment r = R/12 = monthly interest rate P, = principal paid during year y n = no. months for loan 1, = interest paid during year y x = principal paid at end of 1st month