A borrower has entered into a fully amortizing, 4%, 30-year fixed mortgage with monthly payments. The principal is GBP 200,000. At the end of 5 years, the borrower wants to change the payments so that the mortgage will be completely paid off in another 15 years. The adjusted monthly payment (in GBP) needed to pay off the mortgage in the borrower’s time frame (Years 6–20) is closest to:
Answer: C. 1338.
Please help me understand how they landed up with that answer. Thanks.