John obtained a housing loan five years ago for $300,000 at 12 percent for 30 years. Mortgage rates have dropped, so that a new 25-year housing loan can now be obtained at 10 percent. For simplicity, all payments are annually.

a.What is the amount of each annual payment on the $300,000 housing loan?

Round up your answer to the nearest two decimals.

b.What is the outstanding loan balance after making annual payments for five years?

Round up your answer to the nearest two decimal.

c. Assume that John borrows only an amount equal to the outstanding loan balance (i.e. the answer in Part B),what is the amount of annual interest savings you can earn on refinancing?

Round up your answer to the nearest two decimals.