Philip borrowed a loan of $12,000 for 29 years and financed it by 15 level payments payable at the end of every alternate year, with the first payment due at the end of the first year. The effective annual interest rate is 4%. Just before the fifth payment was due, Philip lost his job and the lender reduced the level payment by extending the loan for 6 more years. (a) Find the amount of the original installments. (b) Find the outstanding loan balance just before the fifth payment is due. (c) Find the amount of extra interest that Philip has to pay because of the extension of the loan.

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