Five years ago, you took an interest-only loan. The loan carries a 1% monthly interest rate, and
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Question:
Five years ago, you took an interest-only loan. The loan carries a 1% monthly interest rate, and the loan principal is $150,000. The loan has two more years (or 24 monthly paymenys to be paid at the end of every month)
a. What is the monthly payment of the loan?
b. A financial advisor approaches you and offers to refinance the loan for a consultancy fee of $8000. The new loan has the same characteristics as the current loan but carries a 0.75% monthly rate. Should you refinance the loan? Show your work
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
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