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The Johnson’s are trying to decide if they should refinance their current mortgage to a 15...

The Johnson’s are trying to decide if they should refinance their current mortgage to a 15 year loan. Their current mortgage payment is $790 and they have 20 years of payments remaining. In order to refinance, they would need a loan for $110,000. Currently, the APR for 15 year mortgages is 3.72%.

a) How much will the Johnson’s repay over the next 20 years if they keep their current loan?

b) Find the monthly payment if the Johnson’s refinance to the 15 year loan

c) What is the total amount that would be repaid if the new loan is taken?

c) Should the Johnson’s refinance? Why or why not? Support your answer with numbers!

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