Question: An interest buydown program offers to reduce interest rates by 3.5% from the base rate. Suppose the base rate for a loan of $16000 is

An interest buydown program offers to reduce interest rates by 3.5% from the base rate. Suppose the base rate for a loan of $16000 is 5% for 8 years. What is the monthly payment before and after the buydown? In this case, use monthly compounding, that is, the term is 120 payment periods, and the interest per month is 0.667% before and 0.333% after the buydown.

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