Joann finances her purchase of a $250,000 house with a 7/23 balloon payment mortgage. She pays 30 percent down on her home, and
finances the 2% closing costs with the same loan (i.e., add the closing costs to the loan amount). The initial interest rate on this 7/23 mortgage is 4.2 percent. After the initial period, the renewed interest rate is 5.6% for the remaining life of the mortgage loan. Calculate (a) the monthly payment and (b) the interest portion of the first monthly payment, after the 7/23 mortgage loan is renewed.
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