Bobby Lashley has mortgage loan from 15 years ago for $160,000 @ 7.25% int. for 30yrs. the balance of the loan is now $119,566.70 and rates are currently 6.0% for 15 yrs. origination and mortgage fees (points) at $4,566.70 and are paid out of pocket by Bobby.

What is the effective cost of REFI and ROI

Part A

A. 6.95% EC or 21.22% ROI

B. 5.21% EC or 15.64% ROI

C. 5.85% EC or 17.45% ROI

D. 6.15% EC or 19.00% ROI

E. 6.61% EC or 20.64% ROI

Part B

Based on the information above

should Bobby Lashley refinance assuming he will be in the home full term

A. No because EC of 6.95% is higher than the current rate

B. Cant be determined

C. Yes EC of 6.15% is lower than current rate

D. Yes because EC of 6.61 is lower than current rate

E. No becuase EC is higher than current rate or ROI is too low