Marquis Crane

Mathematics

9 October, 13:47

Cliff Branch bought a home with a 10.5% adjustable rate mortgage for 30 years. He paid $9.99 monthly per thousand on his original loan. At the end of 3 years he owes the bank $65,000. Since interest rates have risen to 12.5%, the bank will renew the mortgage at this rate, or Cliff can pay the bank $65,000. He decides to renew and will now pay $10.68 monthly per thousand on his loan. (You can ignore the small amount of principal paid during the 3 years.)

What was the old monthly payment?

What is the new monthly payment?

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