John Anderson 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 5 years he owes the bank $60,000. Now that interest rates have gone up to 12.25%, the bank will renew the mortgage at this rate or John can pay $60,000. John decides to renew and will now pay $10.48 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?

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Aliwohaish12 Aliwohaish12 · Answer 1 · 2017-05-15T01:38:37+02:00

Old
9.99×60
=599.4
New
10.48×60
=628.8
Percent
((10.48÷9.99)−1)×100
=4.90%

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chisnau chisnau · Answer 2 · 2019-09-27T14:42:02+02:00

Answer:

Percent increase is 4.90%.

Step-by-step explanation:

John paid $9.99 monthly per thousand on his original loan, so number of thousands are = [tex]\frac{60000}{1000}[/tex]= 60

Monthly payment at $9.99 was:

[tex]9.99\times60=599.4[/tex] dollars

Now, new monthly payment at 10.48 is :

[tex]10.48\times60=628.80[/tex] dollars

Percent increase is given as:

[tex][\frac{10.48}{9.99}-1]\times100[/tex]

= [tex]\frac{10.48-9.99}{9.99}\times100[/tex]

= 4.90%