Given the recent drop in mortgage interest rates, you have decided to refinance your home. Exactly five years ago, you obtained a $100,000 30-year mortgage with a fixed rate of 10% APR. Today, you can get a 30-year loan for the currently outstanding loan balance at 8% interest. This loan, however, requires you to pay a $250 appraisal fee and 3 points at the time of the refinancing (1 point equals 1% of the amount borrowed). Ignore tax considerations.

How much is the up-front cash outlay required for you to obtain refinancing?

A) $2,897.22

B) $3,058.52

C) $3,147.22

D) $3,187.53

E) $3,250.00

5. Ignoring time value considerations, how many months must you stay in the house to make the refinancing worthwhile? (In other words, how many months are required for the payment savings to equal the dollar outlays required to refinance?)

A) 13 months

B) 16 months

C) 17 months

D) 18 months

E) 19 months

6. For the drop in monthly payments under the refinancing, how much is attributable to the lower interest rate, as opposed to the amount that is attributable to extending the remaining maturity of your mortgage from 25 years to 30 years?

A) $117.11

B) $126.75

C) $132.20

D) $140.80

E) $168.94

Have the answers just want the explanations