Your gross income is $5,000 per month. How large a mortgage can you afford if the rate is v2 = 8% and you are looking for a 3 year term and a 20 year amortization. 

a) Find the size of your maximum mortgage ($181,081) 

b) After 3 years you renew your mortgage at the same rate but are able to make a $10,000 payment. 

i. Find the size of the new monthly payment. Assume you will amortize the remaining balance over 17 years. ($1,410.95).

ii. Instead of reducing your payment you would like to pay your mortgage off faster and keep your payment the same.  How much time will you save assuming the interest rate stays the same?(23 full and one partial payment -save two years).