Total Amount that has to be paid if total duration for paying money is 20 years = $ 265,000
Rate of interest = 5.25 %(Depreciating rate)
When , time = 5 years
Amount left which is to be paid after 5 years=
![=Principal * [(1-(Rate)/(100))^(time)]\\\\ = 265,000* [(1-(5.25)/(100))^5]\\\\ = 265,000*[((94.75)/(100))^5]\\\\=265,000* (0.9475)^5\\\\ =265,000* 0.763653\\\\ =202368.059](https://img.qammunity.org/2019/formulas/mathematics/high-school/4fqv0oo33bgzszdfv92vmy2m9tui0be9bi.png)
When, time = 6 years
Amount left which is to be paid after 6 years=
![=Principal * [(1-(Rate)/(100))^(time)]\\\\ = 265,000* [(1-(5.25)/(100))^6]\\\\ = 265,000*[((94.75)/(100))^6]\\\\=265,000* (0.9475)^6\\\\ =265,000* 0.72356\\\\ =191743.7363](https://img.qammunity.org/2019/formulas/mathematics/high-school/ce5bt2vy7b4y0khmpvm8tuh5sjveb6i3w8.png)
Difference in payments from year 5 to year 6 = $ 202368.059 - $ 191743.73
=$ 10624.329 (approx)
Monthly payment

Option (B) 880. ... is appropriate.