Question

John Anderson bought a home with a 10.5% adjustable rate mortgage for 30 years. He paid $9.99 monthly per thousand on his original loan. At the end of 5 years he owes the bank $65,000. Now that interest rates have gone up to 12.5%, the bank will renew the mortgage at this rate or John can pay $65,000. John decides to renew and will now pay $10.68 monthly per thousand on his loan. You can ignore the small amount of principal that has been paid.

Answer 1

I solved this question before it's available on Brainly
The answer
Old monthly payment
9.99×65
=649.35
New monthly payment
10.68×65
=694.2
Rate o
((10.68÷9.99)−1)×100
=6.91%

Answer 2

Answer:

The answer is 6.91%

Step-by-step explanation:

John paid $9.99 monthly per thousand on his original loan, so number of thousands  are=

$55000/1000=55$

Monthly payment at 9.99% interest was:

$9.99\times55=549.45$

Now, new monthly payment  at 10.68% is :

$10.68\times55=587.40$

The percent increase  or rate is =

$((\frac{10.68}{9.99})-1)*100$

= (1.06906-1)*100

= 6.906 ≈ 6.91%

So, the answer is 6.91%