Professor Pederson moved into his current home 5 years ago. He has always made his mortgage payments on time. His original loan was for $175,000 and he had a 3.875% nominal interest rate for a 30-year term.

A) Calculate Professor Pederson's current monthly mortgage payment based on the information from above.

B) Professor Pederson just received an email from his bank saying interest rates have dropped and he could reduce his monthly payment. His new rate would be 3.500% with an APR of 3.580% for a new 30-year term. How much would professor Pederson new mortgage payment be? (Hint: Remember, I already made 5 years of mortgage payments)

C) Based on the advertisement Professor Pederson received from his bank how much will he have to pay in fees on his new loan? Calculate the dollar amount.

Answer rating: 100% (QA)

A To calculate Professor Pedersons current monthly mortgage payment we can use the formula for a fixedrate mortgage Monthly Mortgage Payment Loan Amou... View the full answer