CASE STUDY 3 MORTGAGE AMORTISATION A $90 000 mortgage at j2 = 9% p.a. is amortised over 25 years by monthly payments. a) Determine the regular monthly payment and the smaller final payment b) Determine the total interest (total cost of financing). c) Show the first 3 rows of the amortisation schedule. d) Determine the outstanding balance after 2 years. e) Determine the total principal and the total interest paid in the first 2 years. f) Suppose you paid an extra $1000 after 2 years. How much interest would this save over the life of the mortgage? g) How much less interest would be paid if the mortgage could be amortised over 20 years rather than .25 years? h) In the 25-year mortgage, after 2 years interest rates drop to 12 = 8.5% p.a. There is a penalty of 3 months' interest on the outstanding balance for early repayment. Does it pay to refinance