When Florio and Rhoda bought their home, they borrowed $200,000 for 30 years at 6%, compounded monthly. After making 120 payments of $1199 per month, they plan to refinance. They find that they can refinance at 4.5%, compounded monthly, for 15 years. There is a one-time refinancing charge of $750, added to the amount of the refinanced loan. a) Find the Payoff Amount (Unpaid Balance) of Florio and Rhoda's Original 11a) b) Find the amount of their new loan (amount refinanced) 11b) Loan. c) Find their New Monthly Payment amount for the refinanced loan.

When Florio and Rhoda bought their home, they borrowed $200,000 for 30 years at 6%, compounded monthly. After making 120 payments of $1199 per month, they plan to refinance. They find that they can refinance at 4.5%, compounded monthly, for 15 years. There is a one-time refinancing charge of $750, added to the amount of the refinanced loan. a) Find the Payoff Amount (Unpaid Balance) of Florio and Rhoda's Original 11a) b) Find the amount of their new loan (amount refinanced) 11b) Loan. c) Find their New Monthly Payment amount for the refinanced loan.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

When Florio and Rhoda bought their home, they borrowed $200,000 for 30 years
at 6%, compounded monthly. After making 120 payments of $1199 per month,
they plan to refinance. They find that they can refinance at 4.5%, compounded
monthly, for 15 years. There is a one-time refinancing charge of $750, added to
the amount of the refinanced loan.
a) Find the Payoff Amount (Unpaid Balance) of Florio and Rhoda's Original
Loan.
11a)_
b) Find the amount of their new loan (amount refinanced)
11b)_
c) Find their New Monthly Payment amount for the refinanced loan.
11c).
d) Find the amount they saved by refinancing...if any!
11d).

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