Question

Considering the following information, what is the net benefit (before tax) if the borrower refinances the...

Considering the following information, what is the net benefit (before tax) if the borrower refinances the loan? Expected holding period: 6 years; current loan balance: $100,000; current loan interest: 7%; remaining term on current mortgage: 17 years and 5 months; new loan interest: 5.5%; new loan term: 17 years and 5 months; cost of refinancing: $5,000.

a. $1,085.85

b. $886.00

c. -$585.50

d. $1,051.71

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Answer #1

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