Answer:
a. Interest under 10 year mortgage = CUMIPMT(7.1%/12, 10*12, 340000*80%, 1, 10*12, 0)
Interest under 10 year mortgage = 108662.44
Interest under 25 year mortgage = CUMIPMT(8.1%/12, 10*12, 340000*80%, 1, 25*12, 0)
Interest under 25 year mortgage = 363217.16
Difference in interest = 363217.16 - 108662.44
Difference in interest = 254554.72
b. Monthly payment under 10 year = PMT(7.1%/12, 10*12, 340000*80%)
Monthly payment under 10 year = 3172.19
Monthly payment under 25 year = PMT(8.1%/12, 25*12, 340000*80%)
Monthly payment under 25 year = 2117.39
Difference in the monthly payment = 3172.19 - 2117.39
Difference in the monthly payment = 1054.80
