Consider again the mortgage refinance problem faced by Dave and Jana in Problem 16. Assume that they have accepted the refinance offer of a 15-year loan at 3 percent interest rate with out-of-pocket expenses of $2,937. Recall that they are borrowing $208,555.87.
Assume there is no prepayment penalty, so that any amount over the required payment is applied to the principle. Construct a model so that you can use Goal Seek to determine the monthly payment that will allow Dave and Jana to pay off the loan in 12 years. Do the same for 10 and 11 years. Which option for prepayment, if any, would you choose and why?