Question

You are considering refinancing your home. Under the original terms of your mortgage you borrowed $250,000 to be repaid with equal monthly payments over 30 years. The APR on the loan was 4.5%. You have 20 years of payments remaining. If you now can refinance the remaining loan with no prepayment penalties at a 3.5% APR by how much will your monthly payment drop? What is the present value of your savings if your opportunity cost is represented by an APR of 3.5% (with monthly compounding)?

Answer 1

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PV, FV, ANNUITY (Autosaved) Microsoft Excel (Product Activation Failed) Formulas Home Insert Page Layout Data Review View Add-Ins %Cut E AutoSum - A Wrap Text Calibri 11 General ECopy Fill Merge & Center Insert Delete Format Paste в IUY 00 00 Conditional Format Cell Sort & Find & Filter Select % Format Painter Clear Formatting as Table Styles Number Clipboard Font Alignment Styles Cells Editing fx GB139 FT FU FV FW FX EY FZ GA GB GC GD GE GF 137 LOAN 250000.00 4.50% 138 APR 139 YEARS 30 140 MONTHLY RATE 0.3750000% 141 NO OF MONTHS 360 142 1266.71 [=PMT(FY140, FY141,-FY137)] 143 PMT 144 YEARS LFET 145 20 146 NO OF MONTHS LEFT 240 200223.59 [=PV(FY140,FY146,-FY143)] 147 LOAN BALANCE 148 149 REVISED APR 3.50% 0.29166667% 150 MONTHLY RATE 1161.22 [-PMT(FY150,FY146,-FY147)] 151 REVISED PMT 152 105.50 FY143-FY151] 153 SAVINGS PER MONTH = 154 18190.42 [=PV(FY150,FY146,-FY153)] ANSWER PRESENT VALUE OF SAVINGS = 155 MORTGAGE She 130% LOAN OPTIONS profit margin symbols LOCK BOX DOLLAR COST AVG EXPO pv, fv, annuity CAP STRU VALUE ear FVA pva DILUTION NPER APR CPI erences W 03:06 T0 ENG 27-09-2019