Question
You took a 30 year mortgage with monthly payments of $1200. The loan rate is 11% (APR) compounded monthly. 1)How much did you borrow from
You took a 30 year mortgage with monthly payments of $1200. The loan rate is 11% (APR) compounded monthly.
1)How much did you borrow from the bank?
2)You have 25 years left on the mortgage, what is your outstanding balance?
3)Interest rates have gone down to 6% (APR compounded monthly) and you wish to
refinance. Assume you wish to continue payments for the next 25 years, what is
the new monthly payment?
4)Bank imposes a penalty on closing loans early. What is the maximum penalty the
bank can impose such that refinancing will be worthwhile?
please show the steps on how to calculate
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started