A fteen-year adjustable-rate mortgage of $117,134.80 is being repaid with monthly payments of $988.45 based upon a nominal interest rate of 6% convertible monthly. Immediately after the 60th payment, the interest rate is increased to a nominal interest rate of 7.5% convertible monthly. The monthly payments remain at $988.45, and there will be an additional balloon payment at the end of the fteen years to pay the outstanding loan balance.

(a) Calculate the loan balance immediately after the 84th payment.

(b) Calculate the amount of interest in the 84th payment.

(c) Calculate the amount of the balloon payment

Answer : (a) 77884.78 (b) 489.90 (c) $12,168.43, so the total paid at the end of fteen years is $13,156.88

NOTE: use formula to solve