fill the green Q$5.$ When interest rates drop, it is a good time to consider refinancing a loan. Ignore refinancing costs, what is the amount of savings if you

refinance the following loan at the end of the $3$rd year? Your answer should be that by changing the value in cell B$4,$ the result in B$15$ will

be automatically updated. Assuming payments are at the end of each year.

Refinancing Calculator

Refinance at the end of this year:

Original loan: $15$ years, $8\mathrm{.}55\%$ term loan, principle of $$135,000.$

Loan amount $135,000$

Original Annual interest rate, $r,8\mathrm{.}55\%,$ this is the rate in the loan contract.

New Annual interest rate, $r,5\mathrm{.}35\%,$ this is the market rate at the end of the $3$rd year.

Loan period $($years$)15$

Annual payment

Contractual value, end of year $3$

Market value, end of year $3$

Saving from refinancing the loan

What is the saving from refinancing at the end of the $3$rd year?

$22,255$

$2,507$

$16,306$