A reset mortgage allows for one interest rate reset during the life of the loan. The mortgage rate will be reset after 6 years, to fully amortize at the end of the original 30 year period (i.e. after 24 more years). For a 6.625%, $120,000, mortgage, compute the reset payment if the new rate resets to 7.375%. (Hint: calculate how much balance is left after you pay fo r6years at the rate of 6.625%, then use the left balance as the new PV, pay it off for the rest of the 24years @ the rate of 7.375%). Assuming monthly compounding.

a. 820.719

b. 822.190

c. 824.666

d. 826.147

e. 828.001