You currently have an existing mortgage with Bank of America:

Outstanding loan amount: $230,000

Remaining term: 25 years

Interest Rate: 5%

Monthly payment: $1,342

Citibank offers to refinance your current mortgage with the following loan terms:

Loan amount: 230,000

Term 25 years

Interest rate: 4.3%

Monthly payment: $1,278

closing cost: 2% of loan amount

Bank of America has prepayment penalty of 3% of the outstanding loan amount.

Question 1)

If you plan to keep the mortgage until the end, should you refinance now? options

a) Yes, net benefit is $22,400-$11,500=$10,900

b) yes, net benefit is 19,500-11500=$7700

c) No, net benefit is $10,500-11,500= -$1000

d) No, net benefit is $9800-11,500= -$1700

Question 2) If you plan to sell your house in the next 8 years, should you refinance now? options

a) no, net benefits= -$5356

b) no, net benefits = - $1090

c) yes, net benefit is = $2464

d) yes, net benefit is = $ 750

Question 3) What is the payback of this refinance mortgage? options

a) about 180 months

b) about 190 months

c) about 200 months

d) about 210 months

Trying to understand and answer please.