With the following information, compute the net benefit of refinancing: Current loan balance: $200,000 Remaining term: 15 years Interest rate: 6.5 % Old loan monthly payment: $1742.22 Expected number of future payments you will make: 72 Interest rate available on a new loan: 4.5 % Cost of refinancing: 5% of the outstanding balance. what is the resulting net benefit?

With the following information, compute the net benefit of refinancing: Current loan balance: $200,000 Remaining term: 15 years Interest rate: 6.5 % Old loan monthly payment: $1742.22 Expected number of future payments you will make: 72 Interest rate available on a new loan: 4.5 % Cost of refinancing: 5% of the outstanding balance. what is the resulting net benefit?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

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With the following information, compute the net benefit of refinancing: Current loan balance: $200,000
Remaining term: 15 years Interest rate: 6.5 % Old loan monthly payment: $1742.22 Expected number of
future payments you will make: 72 Interest rate available on a new loan: 4.5 % Cost of refinancing: 5% of
the outstanding balance. what is the resulting net benefit?

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