1. Decision Making: An individual has both a car and a house payment and has recently received a raise. In an effort to get out of debt sooner, the individual would like to apply the raise, which amounts to $200 per month, as an additional payment toward the principal of either the mortgage or the vehicle (assuming the individual has a loan for both). The mortgage is $82,000 with an interest rate of 4.25% and $40,000 is owed on the car which currently has a 3.9% interest rate. Both interest rates are compounded monthly.
   1. Assuming the home is schedule to be paid off in 12 years. What is the monthly payment without applying the additional $200?
   2. If the $200 was applied to the monthly payment you got in part a:
      1. when would the loan be paid off?
      2. How much time (years and months) will be taken off of the life of the loan?
   3. Assuming the car is schedule to be paid off in 4 years. What is the monthly payment without applying the additional $200?
   4. If the $200 was applied to the monthly payment you got in part c:
      1. When would the loan be paid off?
      2. How much time (years and months) will be taken off the life of the loan?
   5. Based on your results to b and d, what recommendation would you make to this individual? Why?