Suppose that you are in the process of deciding whether or not to refinance your foxed rate mortgage at a lower rate and you are interested in using the payback period rule of thumb to help you in your decision. Your lender has informed you that the cost of refinancing would be $4,200. You also have a prepaymem penalty of 5% based on your loan balance of $225,000. If your present monthly mortgage payment was $1,650, and your new monthly mortgage payment would be $1,250 after refinancing, determine the payback period. 158 months 38.63 months 28.13 months 10.5 months