You take a fixed-rate mortgage for $140,000 at 7.25% for 30 years, monthly payments. At the end of year two, you unexpectedly inherit $35,000 from your now-favorite grandmother. You decide to apply this $35,000 to the principal balance of your loan.

a . What is the mortgage monthly payment after you apply the $ 35,000 to the principal?

b . How much interest do you save over the life of the loan by doing this assuming that the mortgage is held to maturity ?