A variable-rate mortgage of $140,000 is amortized over 20 years by equal monthly payments. After 12 months the original interest rate of 8% compounded semi-annually was raised to 8.8% compounded semi-annually. Three years after the mortgage was taken out, it was renewed at the request of the mortgagor at a fixed rate of 8.6% compounded semi-annually for a four-year term.
(a) Calculate the mortgage balance after 12 months.
(b) Compute the size of the new monthly payment at the 8.8% rate of interest.
(c) Determine the mortgage balance at the end of the four-year term.