Fred Myers bought a home with a 13% adjustable rate mortgage for 20 years. He paid $11.72 monthly per thousand on his original loan. At the end of 2 years he owes the bank $60,000. Since interest rates have decreased to 10%, the bank will renew the mortgage at this rate, or Fred can pay the bank $60,000. He decides to renew and will now pay $9.66 monthly per thousand on his loan. (You can ignore the small amount of principal paid during the 2 years.)

What was the old monthly payment?

What is the new monthly payment?

What is the percent decrease in his monthly payment (to the nearest tenth) ?

Question

17 December, 19:33

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Answers (1)

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Dayton Alvarez · Answer 1

11.72*60=703.2

9.66*60=579.6

((9.66:11.72) - 1) * 100=-17.6%