I need to know this step by step!

Question

A family has a mortgage on a home for $295,000, amortized over 25 years, at an APR of 4.5%. The monthly payment on the mortgage is $1,639.71/ If the family makes a $25,000 extra payment at the end of the 4^th year of the mortgage, how much interest will they save by the end of the 25-year period of the mortgage?

(solve with 2 tvm solver chart hopefully)

Answer 1

Using TI-84 Financial Solver we find PV of home at this (moment (end of forth year left)

We filled solver like this: N = 252, I% = 4.5, PMT = - 1639.71, FV = 0, P/Y = 12 and C/Y = 12 and we get prezent value PV = $267002.19:

Now new PV = 267002.19 - 25000 = $242002.19

Then using solver with new PV we will get new PMT = - 1486.18 ( - because from family pocket)

Lokk, now left 252 payments. And because we save 252·1639.71 - (252·1486.18 + 25000) = $13689.56