suppose that 10 years ago you bought a home for 120,000, paying 10% as a down payment, and financing the rest at 9% interest for 30 years.

this year (10 years after you first took at the loan) you check your loan balance. only part of your payments have been going to pay fown the loan; the rest has been going towards interest. you see that you still have 96,584 left to pay on your loan. your house is now valued at 170,000.

how much interest have yoh paid so far? (over the last 10 years)

how much equity do you have in your home?

refinancing:

since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate. if you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your new monthly payments be?

how much interest will you pay over the life of the new loan?