You borrowed $484,000 to finance the purchase of your dream house 5 years ago. The terms of the mortgage are as follows, fixed 20 year rate which is 6.75% (APR) with monthly payments.

a. Find the monthly payments

b. Mortgage rates have fallen significantly since you bought the house. You have decided to refinance. New 15-year mortgage rates are 4.8% (APR) compounded monthly. What is your remaining balance on the mortgage (how much money would you have to pay the bank in order to pay the mortgage off completely)?

c. If the amount you borrowed is the same as the remaining balance you calculated in b plus refinancing costs of $15,000 which will be amortized, what are your new monthly payments?

d. What is the total amount of interest you would have paid over the remaining 15 years in your original mortgage? What is the total amount of interest you will pay for your new loan over the lifetime of the mortgage? What is the amount that your total interest payments have been reduced?