Please answer questions C and D and show the formulas in excel. Should be able to solve the question with the information provided. This is all we were given.

Question 2 - Mortgage Refinancing II Suppose you purchased you first house 2 years ago and took out a mortgage for $160,000 with a 6.25% interest rate. The mortgage is a 30 year loan wi monthly payments. Today you can refinance the loan at a 5.50% interest rate for a fixed fee of $5,000. Assume that you would only refinance enough to repay the old loan and the cost of refinancing. A - How much would you still owe on the loan after 2 years? Hint: Utilize the CUMPRINC formula here! Balance of old loan today $ 156,129.66 B - Calculate the amount of the new loan and monthly payments of each loan: Annual Rate Life (In Years) Cost Total Loan Amount $ 160,000.00 $ 161,129.66 Monthly Payments ($985.15) ($914.88) Periods Paid 24 Initial Loan Refinancing 6.25% 5.50% 30 30 0 $ 5,000 C- Would you refinance today? Old Loan New Loan $ 161,129.66 PV (of monthly payments) NPV of Refinancing Refinance? D - Now, consider you are at the end of year 2, as is the case above, and you expect to move in 4 years time, would you want to refinance? Year 4 Months 48 Time Till Move Old Loan New Loan Loan Balance at Move PV at move (consider balance and monthly payments) NPV of Refinancing Refinance? Back to top NEXT Question 2 - Mortgage Refinancing II Suppose you purchased you first house 2 years ago and took out a mortgage for $160,000 with a 6.25% interest rate. The mortgage is a 30 year loan wi monthly payments. Today you can refinance the loan at a 5.50% interest rate for a fixed fee of $5,000. Assume that you would only refinance enough to repay the old loan and the cost of refinancing. A - How much would you still owe on the loan after 2 years? Hint: Utilize the CUMPRINC formula here! Balance of old loan today $ 156,129.66 B - Calculate the amount of the new loan and monthly payments of each loan: Annual Rate Life (In Years) Cost Total Loan Amount $ 160,000.00 $ 161,129.66 Monthly Payments ($985.15) ($914.88) Periods Paid 24 Initial Loan Refinancing 6.25% 5.50% 30 30 0 $ 5,000 C- Would you refinance today? Old Loan New Loan $ 161,129.66 PV (of monthly payments) NPV of Refinancing Refinance? D - Now, consider you are at the end of year 2, as is the case above, and you expect to move in 4 years time, would you want to refinance? Year 4 Months 48 Time Till Move Old Loan New Loan Loan Balance at Move PV at move (consider balance and monthly payments) NPV of Refinancing Refinance? Back to top NEXT