2. Kerry has a $1,973-per-month mortgage payment. He decides to refinance his $204,000 balance at 5% over 20 years. What's his new monthly payment?

The formula for the amount of a monthly payment A on principal amount P at interest rate i loaned for t years is given by

... A = P (i/12) / (1 - (1 + i/12) ^ (-12t))

Filling in the given values, this is

... A = $204000 (.05/12) / (1 - (1 +.05/12) ^ (-12·20)) ≈ $1346.31