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For the following case, compute the net benefit of refinancing: Existing loan, current amount: $150,000 Remaining term: 19 years Loan interest rate: 5.25 percent Current
For the following case, compute the net benefit of refinancing:
Existing loan, current amount: $150,000
Remaining term: 19 years
Loan interest rate: 5.25 percent
Current market interest rate (15 years): 3.5 percent
Cost of refinancing: 5 percent of new loan amount.
Expected time before payoff of loan: 9 years.
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