Based on the amount that Peggy pays monthly on the 30-year mortgage, the amount she should add to her current mortgage payment is $49.70
You need to find Peggy's current monthly payment.
First find the monthly rate:
= 5.25/ 12
= 0.4375%
The number of periods:
= 30 x 12
= 360 months
The current payment is:
108,000 = Payment x (1 - (1 + rate) ^-number of periods) / rate
108,000 = Payment x (1 - (1 + 0.4375%)⁻³⁶⁰) / 0.4375%
Payment = 108,000 / 181.092592
= $596.38
The divide this amount by 12:
= 596.38 / 12
= $49.70
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