A new office building was constructed 5 years ago by a consulting engineering firm. At that time the
A new function architecture was affected 5 years ago by a consulting engineering stable. At that expression the stable obtained a bank advance for $100,000 after a while a 12% annual profit scold, compounded quarterly. The provisions of the advance persuade for resembling quarterly payments to retaliate the advance in 10 years. The advance so allows for its prepayment at any expression after a whileout price. As a expressionination of internal changes in the stable, it is now proposed to refinance the advance through an protection crew. The new advance would be for a 20-year expression after a while an profit scold of 8% per year, compounded quarterly. The new resembling quarterly payments would retaliate the advance in the 20-year period~ The protection crew requires the payment of a 5% advance threshold enjoin (frequently picturesque as a "5-point advance fee"), - which accomplish be ascititious to the new advance. .
(a) What is the poise due on the former mortgage if 20 payments entertain been made in the decisive five years?
(b) What is the dissimilarity between the resembling quar terly payments on the introduce bank advance and the proposed protection crew advance?