Your job in Middle Musquodoboit has been working out really well and you have decide to purchase a piece of property with a farm house and a barn on the land near your work. The property has a barn where they can raise cows, horses, chickens, sheep and plant spaghetti trees. You have managed to save $40,000 to use as a down payment on the $400,000 price. You negotiate to finance your purchase over 25 years making monthly payments. The bank is offering a 25 year amortized mortgage loan at 5.25 percent with a 5 year term.

1. Calculate your monthly payments for this loan. Show your work! (4 marks)

2. Prepare an amortization table for the first 5 months of your mortgage.

(3 marks)

3. At the end of the 5 year term of your mortgage, how much will you still owe on your loan? Show your work! (3 marks)

d. If you refinance your loan for the remaining 20 years at a negotiated interest rate of 3.75%, what are you new loan payments? Show your work! (4 marks)