Five years ago, Rhythm contracted a $20-$year constant$-$payment monthly fully$-$amortizing loan worth CHF $850\text{'}000.$ The initial fixed

contract rate was $4\%$ per year. A refinancing option requires a $2\%$ prepayment penalty and $2,5\%$ origination fees. If he holds the new loan

to maturity $($for the next $15$ years$),$ what should the new annual contract rate be if his goal is to save $CHF400$ per month with the monthly

payment?

a$.4,44\%$

b$.2,19\%$

c$.4,00\%$

d$.3,34\%$

Your answer is incorrect.

The correct answer is:

$2,19\%$