The monthly payments on a $30,000 loan at 10.5% compounded monthly were calculated to repay the loan over a 10-year period. After 32 payments were made, the borrower became unemployed and, with the approval of the lender, missed the next three payments.
a. What amount paid along with the regular payment at the end of the thirty-sixth month will put the loan repayment back on the original schedule?
b. Instead of the “make-up” arrangement in Part (a) ,suppose the regular loan payments (beginning with the payment at the end of the thirty-sixth month) are recalculated to put the loan back on its 10-year repayment “track.” What will be the new payments?