. The Jacks borrow $10,000 from a bank to buy some home furnishings. Interest is j12 = 9% and the term of the loan is 3 year. After making 15 monthly payments, the Jacks miss the next 2 monthly payments. The bank forces them (the Jacks) to renegotiate the loan at a new higher interest rate j12 = 10.5% p.a.

Determine: (a)The original monthly payments. [2 marks]

(b)The outstanding balance of the loan at the 17th month. [3 marks]

(c) The new monthly payments if the original length of the loan term is not extended. [5 marks] (d)With the new interest rate, the Jacks decide to pay $400 per month to pay up the loan, to which the bank agrees. Calculate: i. The reduction in the loan term with the new payment, and new higher rate. [5 marks] ii. The partial payment after the final full payment