Suppose you currently have 25 years remaining on a mortgage that started as a $200,000, 30-year 6% mortgage. Your current balance is $186,108.71. Your current payment (including both principal and interest) is $1,199.10. Ignoring closing costs, evaluate whether you should refinance into a 30-year 5%mortgage or a 15-year 4% mortgage. Determine the following for both alternatives:

a. What would be the new monthly payment assuming you refinance the existing balance of $186,108.71?

b. What would be the total accumulated interest savings over the life of the mortgage (the total interest costs of the new mortgage minus the total interest costs of the existing mortgage) ignoring differences in the time value of money?

c. What factors will you take into account for your alternatives?