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Considering the following information, what is the benefit of refinancing the loan Expected holding period: 3 years Current loan balance: $100,000 Current loan interest: 7% Current loan mortgage payment: $908.33 Remaining term on current mortgage: 15 years New loan interest: 5.5% New loan mortgage payment: $817.08 New loan term: 15 years Cost of refinancing: $5,000 Assume that the opportunity cost is the interest rate on the new loan (5.5%).

Considering the following information, what is the benefit of refinancing the loan Expected holding period: 3 years Current loan balance: $100,000 Current loan interest: 7% Current loan mortgage payment: $908.33 Remaining term on current mortgage: 15 years New loan interest: 5.5% New loan mortgage payment: $817.08 New loan term: 15 years Cost of refinancing: $5,000 Assume that the opportunity cost is the interest rate on the new loan (5.5%).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ef 628.

Considering the following information, what is the benefit of refinancing the loan? Expected holding period: 3 years Current loan balance: $100,000 Current loan interest: 7% Current loan mortgage payment: $908.33 Remaining term on current mortgage: 15 years New loan interest: 5.5% New loan mortgage payment: $817.08 New loan term: 15 years Cost of refinancing: $5,000 Assume that the opportunity cost is the interest rate on the new loan (5.5%). -$2,025 -$5,000.00 $3,285 -$1.715
Transcribed Image Text:Considering the following information, what is the benefit of refinancing the loan? Expected holding period: 3 years Current loan balance: $100,000 Current loan interest: 7% Current loan mortgage payment: $908.33 Remaining term on current mortgage: 15 years New loan interest: 5.5% New loan mortgage payment: $817.08 New loan term: 15 years Cost of refinancing: $5,000 Assume that the opportunity cost is the interest rate on the new loan (5.5%). -$2,025 -$5,000.00 $3,285 -$1.715
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