Calculate the total savings after a change in interest rate on a loan.

To solve this problem, we need to calculate the original monthly payment, then the new monthly payment after the interest rate change, and finally the difference between the two.

Step 1: Calculate the original monthly payment ($PMT_1$)

The formula for the present value of an ordinary annuity is:

$$PV = PMT \times \frac{1 - (1 + i)^{-N}}{i}$$

Where:

• $PV$ = Present Value (loan amount) = R911 012.00
• $PMT$ = Monthly Payment
• $i$ = Monthly interest rate = $\frac{\text{Annual interest rate}}{12}$
• $N$