Chapter 5.4, Problem 40E

a. If the Worthingtons in Exercise 38 save for their balloon payment with a sinking fund, find the size of the necessary monthly payment into that fund if their money earns $7\%$ interest.

b. Find the Worthingtons' total monthly payment for the first five years.

c. Find the Worthingtons' total monthly payment for the last twenty-five years.

Jack and Laurie Worthington bought a house for $\$163,700$. They put $10\%$ down, borrowed $80\%$ from their bank for thirty years at $12\%$ interest and convinced the owner to take the second mortgage for the remaining $10\%$.That $10\%$ is due in full in five years(this is called a balloon payment), and the Lees agree to make monthly interest payments to the seller at $12\%$ simple interest in the interim.