Nathan Smith has just purchased a new car for $35,000. He paid $10,000 down and signed a note for the remaining $25,000. The interest rate on the note is 12% compounded monthly, or 1% per month.

Required:

1. Compute the amount of Mr. Smith’s monthly payment if he plans to pay off the $25,000 note in 25 monthly payments. (Remember: The interest rate is 1% per month.)

2. Repeat part (1) assuming that Mr. Smith wishes to repay the note in 50 monthly payments.

3. Assume that Mr. Smith decides to repay the note in 50 monthly payments. What is the balance remaining on the note immediately after he makes the 25th payment?