Reference no: EM132997988

Despite the lockdown, Zax has found that business has actually improved slightly, as more people are buying computers and accessories to set up their home offices. Zax has decided to increase his repayment to $4323 per month starting next month.

Problem 1: How many full payments of $4323 will Zax make under this new arrangement? Keep in mind the bank is now charging a new interest rate, Zax still currently owes $393,000 on the loan, and the first repayment moving forward is exactly one month from today

Problem 2: The number you calculate in part a) represents the number of FULL re-payments of $4323 that Zax will make on this loan. Which of the following is the most accurate statement we can make about the final extra repayment (if any), without doing any further calculations?

i. The extra repayment will be smaller than $4323
ii. The extra repayment will be larger than $4323
iii. There will not be any extra repayment required
iv. We cannot say for certain without actually doing the calculation

Problem 3: Calculate the size of the extra payment made exactly one month after the last full payment of $4323 to the nearest cent. If there is no extra repayment needed, then put 0.