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Suppose that you are currently making monthly payments on a $275600.00 25-year mortgage at 4.20% interest compounded monthly. For the last 10 years, you have

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Suppose that you are currently making monthly payments on a $275600.00 25-year mortgage at 4.20% interest compounded monthly. For the last 10 years, you have been paying the regular monthly payments. You now have the option to refinance your current mortgage with a new 20- year mortgage that has an interest rate of 3.80% compounded monthly. Note that the lender of the new loan has a closing cost fee of $1,000 (for title insurance, home appraisal costs, etc.) for the new (refinanced) mortgage. The lender stipulates that closing cost must be paid in cash and cannot be part of the new loan. You are to determine whether you would save or lose money in interest if you were to refinance your home. Take the closing costs into account when determining if you would save or lose money. You are working for a finance firm and a client comes to you and wants to know how much money they should put in an annuity (which earns 3.012% interest compounded semiannually) at the end of each six months for the next 42 years. Their goal is that when they retire at the end of 42 years, they would like the semiannual withdrawals from the annuity to total $62,000 per year and that the annuity is to last for the next 28 years. You are to determine the amount which your client needs to deposit into the annuity at the end of each six months for the next 42 years so that they can meet their retirement goal. Do the following: A. Show all your work that you used to answer this problem. Label the steps and important values as you solve the problem. Note that when you use the TVM Solver, show the all variables and the values you entered into the variables) and solved for. (10 points) B. Find the total amount of interest client will earn (from the time they start contributing to the account to when they make the last withdrawal). Show how you arrived at the answer. (2 points)

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