Chapter 5.4, Problem 39E

a. If the Lees in Exercise 37 save for their balloon payment with a sinking fund, find the size of the necessary monthly payment into that fund if their money earns $6\%$ interest.

b. Find the Lees' total monthly payment for the first five year.

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

Ray and Helen Lee bought a house for $\$189,500$. They put $10\%$ down, borrowed $80\%$ from their bank for thirty years at $11\frac{1}{2}\%$ 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.