Lars now has a new girlfriend and together they want to buy a house. They want to take out a mortgage with constant monthly payments for 20 years (always at the end of the month). To do so, they visit several banks. Bank A offers them an effective annual interest rate of 1.9% and constant monthly payments of 1,000 if they sign an insurance contract which costs 2,500 when they sign the mortgage contract. Bank B offers them a loan of 198,787 with monthly payments of 976.42 on condition that they pay a fixed annual amount for the insurance contract for 20 years, the first time when the contract is signed. With both banks, they pay off their loan for the first time 1 month after the conclusion of the contract.

a) How much can they borrow from Bank A? How much at most can they spend annually on the insurance contract with Bank B in order to make the two proposals equivalent?

In the end, Lars chooses Bank A's loan. 8 months after taking out the loan, however, he falls ill and receives permission from his bank not to pay off the loan for 6 months.

a) How much is the new monthly amount he has to pay if the original maturity of the loan doesn't change?

b) How much interest will he pay in total as a result of this deferral compared with the original repayment plan?