Problem: Over the last ten years, the Gibsons have saved $250 at the end of the month at 1.1% compounded monthly for a down payment on a house. They used all the money down they have accumulated for the down payment on a home they bought for $256,000. For the remaining balance of the cost of the house, they took out a 30 year mortgage at 6.5%. Support your statements with examples.

Required:

a. How much money did they have for a down payment?

b. How much is the remaining balance?

c. What is their monthly payment?

d. What will be the total amount of their mortgage payments after the 30 years?

e. How much money will they have paid in interest over the lifetime of the loan?