1. You purchase a $325,000 town home and you pay 25 percent down. You obtain a 30-year fixed-rate mortgage with an annual interest rate of 5.85 percent and monthly payments. After five years you refinance the mortgage for 25 years at a 4.25 percent annual interest rate. After you refinance, what is the new monthly payment (to the nearest dollar)?

A) $1,422

B) $1,401

C) $1,226

E) $1,296