Question: Suppose a homeowner has an existing mortgage loan with these terms: Remaining balance of $150,000, interest rate of 8%, and remaining term of 10 years

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Suppose a homeowner has an existing mortgage loan with these terms: Remaining balance of $150,000, interest rate of 8%, and remaining term of 10 years (monthly payments). This loan can be replaced by a loan at an interest rate of 6%, at a cost of 3% of the outstanding loan amount. Should the homeowner refinance? What is the net benefit(cost) to refinance(taking into account TVM)? (answer to 2 decimals 0.12 )

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Short Term Financial Management 1st Edition by Ned C Hill

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