Assume that 3 years ago you arranged a mortgage of $100,000 at j2 =10% (2 means compounded semi-annually) amortized over 25 years with level monthly payments and a 5 year term. Rates now have dropped to j2 = 8%. You want to terminate the contract and sign a new one with the lower rates. But you dont have any prepayment options specified in the current contract. If you decide to prepay all outstanding balance right now, what would be the charge for:

(a) three month interests

(b) interest rate differential to the end of the term

(c) Based on (a) and (b), what penalty the lender is expected to charge