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For the following case, compute the net benefit of refinancing: Existing loan, current amount: $200,000 Remaining term: 28 years Loan Interest rate: 5.5 percent Current

For the following case, compute the net benefit of refinancing:

Existing loan, current amount: $200,000 Remaining term: 28 years Loan Interest rate: 5.5 percent Current market interest rate: 4.0 percent Cost of refinancing: 6 percent of loan amount. Expected time before payoff of loan: 6 years

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