Question: A borrower has secured a 30 year, ( $ 200,000 ) loan at ( 8 % ) with monthly payments. Fifteen years later, the borrower

A borrower has secured a 30 year, $ \$ 200,000 $ loan at $ 8 \% $ with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with a fifteen year mortgage at $ 7.25 \% $. However, the up front fees, which will be paid in cash, are 52,500 . What is the return (annual rate) on investment if the borrower expects to remain in the home for the next fiteen years? \

answer choices

28.89%

15.74%

31.23%

22.62%

23.81%

answer choices above!

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

A borrower has secured a 30 year, $191,000 loan at 7% with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 6%. However, the new...

A borrower has secured a 30 year, $150,000 loan at 7% with monthly payments. Fifteen years later, the borrower has the opportunity to refinance with a fifteen year mortgage at 6%. However, the up...

A borrower has secured a 30 year, $255,000 loan at 7% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 5%, what would...

A borrower has secured a 30 year, $115,000 loan at 6% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 6%, what would...

A borrower has secured a 30 year, $124,000 loan at 3% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 4%, what would...

A borrower has secured a 30 year, $189,000 loan at 5% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 9%, what would...

A borrower has secured a 30 year, $230,000 loan at 4% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 6%, what would...

A borrower has secured a 30 year, $189,000 loan at 4% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 6%, what would...

A borrower has secured a 30 year, $200,000 loan at 6% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 5%, what would...

Q2 Sdn. Bhd. is a manufacturing company. It manufactures 2 types of products, known as 'Al' and 'A2'. The following information is given for a period: - The standard direct material and direct labour...

Discuss how you will deal with problems or grievances that arise from the performance feedback.

PROBLEM 3-8. Production Cost Report, Missing Information Marion Chemicals produces a chemical used as a base in paints. In the manufacturing process, all materials are added at the start of the...

SIMAD UNIVERSITY Class: BACC25 Subject: Islamic Accounting Instructions: a) Follow The Instructions. Midterm Exam Instructor: All Ibrahim Date: 6-4-2022 b) You Have 1.5 Hrs. To Complete This Test. c)...

3. Contrast relational contexts in organizations

2. Describe ways in which organizational culture is communicated

1. Describe and compare approaches to managing an organization