The monthly payments on the Wolskis’ $166,000 mortgage were originally based on a 25-year amortization and an interest rate of 7% compounded semiannually for a five-year term. After two years, they elected to increase their monthly payments by $100, and at the end of the fourth year they made a $10,000 prepayment.
a. How much have they shortened the amortization period?
b. What was the principal balance at the end of the five-year term?