Solve each of the following problems using the formulas for compound interest, the effective rate of interest, and the present and future values of annuities. Show your work, in particular how you start the problem: which equations you are using and where you are putting the variables.

Sarah purchased a condo for $200,000 with a $45,000 down payment and a $155,000 bank loan. The mortgage is to be amortized in just 15 years with an interest rate of 3% per year, compounded monthly. 10 years later, the value of her condo has risen to $260,000 and she would like to sell her property. How much does she still owe on her mortgage? What is her equity in the condo at this point?