Jim Tree bought a home with a 10% adjustable rate mortgage for 20 years. He paid $9.66 monthly per thousand on his original loan. At the end of 2 years he owes the bank $55,000. Since interest rates have risen to 12%, the bank will not renew the mortgage at this rate, or Jim can pay the bank $55,000. He decides to renew and will now pay $11.02 monthly per thousand on his loan. For comparison purposes the small amount of principal that has been paid during the 2 years can be ignored.

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New monthly payment =
Percent increase in monthly payment (to nearest tenth) =