Youve just bought a house and took a $300,000 mortgage that you plan to repay in equal monthly payment of $3,159.67 during the next 25 years starting next month (i.e., you will make a total of 300 monthly payments). The monthly interest rate is 1% Problem 7: How much of your SECOND payment will be interest? A) $2996 B) $2997 C) $2998 D) $2999 E) $3000

Problem 8: What will be your balance 5 years from now (right after your 60th payment)? A) $110420 B) $240000 C) $275674 D) $281816

Problem 9: If 10 years from now you will make a pre-payment (an extra payment in addition to your regular 120th payment) of $20,000 by how many months (rounded to the closest integer) will it decrease the length of your mortgage? A) 6 months B) 11 months C) 17 months D) 19 months E) 32 months Problem 10: If 10 years from now you will make a pre-payment (an extra payment in addition to your regular 120th payment) of $20,000 by how much such prepayment will decrease your outstanding balance 17 years from now (at the time of your 204th payment)? A) $24,387 B) $36,334 C) $46,134 D) $52,364 E) $66,007