You are purchasing a house for $95,000. The lender requires a 10% down payment, and will finance the rest with a 30 year fixed rate mortgage with monthly payments at 9 7/8% (interest rate is 9.875) with two discount points charged.
The payment is $742.44
a) Calculate the balance of the loan after 2 years and 3 years.
b) How much principal is paid back during the third year?
c) How much interest is paid during the third year?
d) How much interest is paid over the life of the loan if the loan is held to maturity?