Ten years ago the Jacksons bought a house, taking out a 30 year mortgage for $130,000 at 6.25%. This
year (exactly 10 years later) they refinanced the house, taking out a new 30 year mortgage for the
remaining balance at 4.375%.
a. What was the monthly payment on the original 6.25% mortgage?
b. What was the remaining balance after 10 years (the amount they then refinanced)?
c. How much interest did they pay during those first 10 years?
d. What is the monthly payment on the refinance 4.375% mortgage?
e. How much interest will they pay over the 30 year term of the refinance?
f. How much total interest will they pay over the full 40 years the Jacksons have a loan for the
house?
Make sure your work shows how you are solving the problems, but feel free to use your calculator
extensively - you don't need to show detailed steps of the formula evaluation. But please setup the
problems using the formulas we learned this week, and don't just use the PMT solver in the
calculator.