You plan to buy a small apartment. It costs $300,000. You plan to put a 10% down payment and pay the rest by taking a 30-year mortgage at a fixed interest rate of 7.25%. a) What is your monthly mortgage?

Please give works on the Financial calculator.

(b)At the end of five years, the mortgage company allow you to refinance your mortgage at a fixed interst rate of 6.25% at no refinancing cost. What will your new monthly mortgage payment be henceforth? hint: find out the princeple balance at the end of 5 years. Treat that amount as a new 25-year mortgage and recalculate its monthly payments.)

(c)What if there is a $5000 additional re-financing cost?

(d)As in (c), how much lower must any re-fi mortgage rate be in order to make it worthwhile to re-finance?

(e)If in (b), there is 1-point attached to the 6.25% re-fi rate, then what is the Adjusted APR of this mortgage rate?