Pelican Recreational Services owes $27 500 secured by a collateral mortgage. The mortgage is amortized over 15 years by equal payments made at the end of every 3 months and is renewable after 3 years.
(a) If interest is 7% compounded annually, what is the size of the payments?
(b) How much of the principal is repaid by the fourth payment?
(c)What is the balance at the end of the 3-year term?
(d) If the mortgage is renewed for a further 4 years but amortized over 8 years and interest is 7.5% compounded semi-annually, what is the size of the quarterly payments for the renewal period?
(e) Construct a partial amortization schedule showing details of the first three payments for each of the two terms.