7.87. The Mosers buy a camper trailer and take out a $15 000 loan. The loan is amortized over 10 years with monthly payments at j = 18%. (a) Find the monthly payment needed to amortize this loan. (6) Find the amount of interest paid by the first 36 payments. 17 (c) After 3 years (36 payments) they could refinance their loan at j2 = 16% provided they pay a penalty equal to 3 months' interest on the outstanding balance. Should they refinance? Show the difference in their monthly payments. Ans. (a) $264.13; (b) $7302.74; (c) Yes, $2.83 7.88 A couple buys a home and signs a mortgage contract for $120 000 to be paid with monthly payments over a 25-year period at j2 = 10%. After 5 years, they renegotiate the interest rate and refinance the loan at j2 = 7%. Find (a) the monthly payment for the initial 5-year period; (b) the new monthly payment after 5 years; (c) the accumulated value of the savings for the second 5-year period at j12 = 3% valued at the end of the second 5-year period; (d) the outstanding balance at the end of 10 years. Ans. (a) $1114; (b) $113 271.22; (c) $15 682.65; (d) $97 554.61