Question
You have a mortgage balance of $110,000 that will require you to make 120 more payments of $1,000, starting next month. Alternatively, you can take
You have a mortgage balance of $110,000 that will require you to make 120 more payments of $1,000, starting next month.
Alternatively, you can take out a loan today for $110,000 with an interest rate of 2.41% APR compounded monthly and pay off the original mortgage.The new loan will require you to make 120more payments, starting next month. If your investments earn 5.5% APR, compounded monthly, how much will you save in PV terms by taking out the new loan to pay off the original mortgage?
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Financial Reporting Financial Statement Analysis And Valuation
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
10th Edition
0357722094, 978-0357722091
