Jon Ericson bought a home with a 11.5% adjustable rate mortgage for 20 years. He paid $10.67 monthly per thousand on his original loan. At the end of 2 years he owes the bank $50,000. Now that interest rates have gone up to 13%, the bank will renew the mortgage at this rate or Jon can pay $50,000. Jon decides to renew and will now pay $11.72 monthly per thousand on his loan. You can ignore the small amount of principal that has been paid.
What is the amount of the old monthly payment? =$
What is the amount of the new monthly payment? =$
What is the percent of increase in his new monthly payment? =%
2 answers