Problem:
You decide to buy a chalet in the mountains which cost 160,000$ by making a down-payment of 40,000$ and financing the remaining balance over 25 years with monthly payments. The local bank offers you 5.4% interest compunded monthly.
Required:
Question 1: What are your monthly payments?
Question 2: How much interest is the bank earning?
Question 3: You decide after 15 years to pay off the remaining balance. What is this remaining balance?
Question 4: How much are you saving by paying the remaining balance after 15 years?
Note: Solve the problem and show all work.