10 ) Jake and James received a 15 - year mortgage of $ 300,000 to purchase a condominium . They negotiated a fixed interest rate of 4 % compounded semi annually for a 5 - year term . Their mortgage contract also stated that they could prepay 8 % of the original principal every year without an interest penalty . By how much did their amortization period shorten if : ( ) They made a prepayment of $ 30,000 at the end of the first year ? ( ii ) They increase the periodic payment by 20 starting from the 12th payment ?