Calculate the monthly payment for a 20 year mortgage on a farming operation in NC. The cost of the farm was $900,000 and you put 10 percent down. The bank is charging you 6% interest, compounded monthly. Given the situation above, suppose that the interest rates drop to 5 % after five years. You can get a new 15 year mortgage for $2,000 fee at that new rate plus 2 points that you would have the bank finance. Should you refinance? What would your new payment be? Suppose you are getting a loan from a bank to purchase a feed business. The interest rate on the loan is 6 percent, the amount of the loan is $1,000,000. The loan is for 15 years. The bank is charging you $50,000 for the loan in cash on the day of closing, what is the APR