1. You have been living in the house you bought 7 years ago for $400,000. At that time, you took out a loan for 80% of the house at a fixed rate 20-year loan at an annual stated rate of 8.0%. You have just paid off the 84th monthly payment. Interest rates have steadily to 4.5% per year, and you think it is finally time to refinance the remaining balance over the residual loan life. But there is a catch. The fee to refinance your loan is $5,500. Should you refinance the remaining balance? How much would you save/lose if you decided to refinance?

Yes, gain $51,094.12

No, lose $51,094.12

No, lose $56,594.12

Yes, gain $56,594.12