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Homework answers / question archive / Five years ago, Marcus bought a house

Five years ago, Marcus bought a house. He secured a mortgage from his bank for $1, 900, 000. The mortgage had monthly payments for 20 years with an interest rate of 6.0% compounded monthly. Interest rates have fallen to 4.5% compounded monthly, and Marcus still intends to make monthly payments and to pay back the debt over the remaining 15 years.

a) How much were Marcus' initial monthly payments?

b) What is the outstanding principal on his mortgage?

c) How much are Marcus' new monthly payments?

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