Question

You have a mortgage balance of $110,000 that will require you to make 120 more payments...

You have a mortgage balance of $110,000 that will require you to make 120 more payments of $1,005, starting next month.

Alternatively, you can take out a loan today for $110,000 with an interest rate of 2.83% APR compounded monthly and pay off the original mortgage.             

The new loan will require you to make 120more payments, starting next month.                                           

                                                                                     

If your investments earn 6.14% APR, compounded monthly, how much will you save in PV terms by taking out the new loan to pay off the original mortgage?   

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SOLVED WITH BA II PLUS CALCULATOR

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