Interest for the initial 4-year term of a $105 000 mortgage is 4.39% compounded semi-annually. The mortgage is to be repaid by equal weekly payments over 20 years. The mortgage contract permits lump-sum payments at each anniversary date up to 10% of the original principal.
(a) What is the balance at the end of the 4-year term if a lump-sum payment of $7000 is made at the end of the third year?
(b) How many more payments will be required after the 4-year term if there is no change in the interest rate?
(c) What is the difference in the cost of the mortgage if no lump-sum payment is made?