5. (2.5 points) Two years ago, you purchased a $18,000 car, putting $3,500 down and borrowing the rest. Your loan was a 48-month fixed rate loan at a stated rate of 6.0% per year. You paid a non-refundable application fee of $100 at that time in cash. Interest rates have fallen during the last two years and a new bank now offers to refinance your car by lending you the balance due at a stated rate of 3.5% per year. You will use the proceeds of this loan to pay off the old loan. Suppose the new loan over the residual loan life requires a $200 non-refundable application fee. Given all this information, should you refinance? How much do you gain/lose if you do?

A. Yes, gain $198.81

B. Yes, gain $1.19

C. No, lose $1.19

D. No, lose $198.81