Sara just bought a house yesterday in Ontario. The house was listed at $285,000 and Eric

made a down payment of $50,000 and took out a 25-year mortgage to finance the purchase. The

quoted interest rate is 5% and the first mortgage payment is in one month.

( Canadian mortgages are special in that the interest rate is quoted as a semi-annually compounded APR )

(a) How much is the monthly payment of the mortgage?

(b) How much is the total interest cost if Sara follows the monthly payment schedule to the

end of the mortgage term?

(c) What is the balance of this mortgage after 5 years?

(d) Today, following a friends advice, John decides to switch to bi-weekly payments. How

much is the bi-weekly payment? And how much interest can he save?

(e) Instead of making bi-weekly payments, suppose Sara decides to prepay $5,000 at the end

of the first year (the payment is made after the 12th monthly payment). How much interest

will she save?

(f) How much is the monthly payment if it is a US mortgage with the same principal amount,

quoted rate and mortgage term?

Please list the details calculation step and formula, (not excel forrnula)Thank you!