A person borrows $16,000 at 9.6% interest compounded monthly to buy a used car. He amortizes the loan with 60 monthly payments over the next 5 years. After making the fifth payment he has the opportunity to refinance the loan at 7.2% interest compounded monthly over the next 5 years with 60 monthly payments.

1. What is the balance remaining on the original loan after he makes the fifth payment?

2. If he does not refinance then how much interest will he pay on the original loan after the fifth payment?

3. Find the payment size if he refinances the balance remaining on the original loan after the fifth payment at 7.2% interest compounded monthly over the next 5 years with 60 payments.

4. How much interest will he pay on the refinanced loan?

5. If there is a $400 fee to refinance the loan then how much money (if any) is saved by

refinancing?