Loan Amount = $150,000
In Option A,
Interest Rate = 2.50%
Time Period = 30 years
Calculating Monthly Payment,
Using TVM Calculation,
PMT = [FV = 0, PV = 150,000, T = 360, I = 0.025/12]
Monthly Payment = $592.68
Total Interest Paid = 360(592.68) - 150,000 = $63,364.80
In Option B,
Interest Rate = 2.25%
Time Period = 12 years
Calculating Monthly Payment,
Using TVM Calculation,
PMT = [FV = 0, PV = 150,000, T = 144, I = 0.0225/12]
Monthly Payment = $1189.58
Total Interest Paid = 144(1189.58) - 150,000 = $21,299.52
Total Interest Saved in Option B = 63,364.80 - 21,299.52
Total Interest Saved in Option B =$42,065.28
-13 points TanFin11 5.3.054 My Notes Ask Your Tea The Martinezes are planning to refinance their ...