= Wr ID Calibri (Body) ~ 12 A A Me BI V Paste V J33 fx D E F C A B 1 5 2 Interest-only loan, refinancing) Five years ago, you took an interest-only 3 loan. The loan carries a 1% monthly interest rate, and the loan principal is 4 $150,000. The loan has two more years (24 monthly payments to be paid at 5 the end of every month). 6 a. 7 What is the monthly payment on the loan? 8 b. 9 A financial advisor approaches you and offers to refinance the loan 10 for a consultancy fee of $8,000. The new loan has the same charac- a 11 teristics as the current loan but carries a 0.75% monthly rate. Should 12 you refinance the loan? 13 14 15 16 17 18 Monthly interest rate 1% 19 Principal 150,000.00 20 Loan term (months) 24 21 22 Section a 23 Monthly payment 7,061.02 24 25 Section b. 26 Refinancing rate 0.75% 27 PV of remaining payments on the loan 28 Outstanding balance of the loan 29 Benefit from refinancing 30 Refinancing cost (consultancy fee) 31 Refinance? 32 33 34 35