Consider a 30-year mortgage with an interest rate of 10% compounded monthly and a monthly payment
of $850.
(1) Calculate the principal.
(2) How much of the principal is paid the first, 5th, 20th and last year?
(3) How much interest is paid the first, 5th, 20th and last year year?
(4) What is the total amount of money paid during the 30 years?
(5) What is the total amount of interest paid during the 30 years?
(6) What is the unpaid balance after 25 years?
(7) How much has to be deposited into a savings account with an interest rate of 4% compounded
quarterly in order to pay the unpaid balance of the mortgage after 25 years?
(8) How much has to be deposited each quarter year in a fund with an interest rate of 8% compounded
quarterly in order to cover the unpaid balance after 25 years?