You borrow $125,000 to buy a house. Your mortgage rate is 6% per year (0.5% per month).

The term of the mortgage is 30 years and you will have the same required payment every month. Ignore taxes.

(i) What is your monthly mortgage payment?

(ii) After 30 months of payments, what is the remaining balance on your mortgage?

(iii) For the first 30 months you make the required payment. Beginning in the 31st month you pay an extra $100 per month

every month (you pay the required payment plus $100). These extra payments will shorten the life of your mortgage.

How long will it take to pay off the mortgage?