You purchased a house five years ago and borrowed $300,000 from a bank to buy the house.
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Question:
You purchased a house five years ago and borrowed $300,000 from a bank to buy the house.
The loan you used has 300 more monthly payments of $1,610 each, starting next month, to pay off the loan.
You can take out a new loan for $270,000 and pay off the original loan. The new loan has an interest rate of 4% APR compounded monthly , with 300 more payments, starting next month to pay off this new loan.
If your investments earn 2.75% APR compounded monthly , how much will you save in present value terms by using the new loan to pay-off the original loan?
$40,069 |
$40,847 |
$42,072 |
$37,768 |
$38,901 |
Related Book For
Intermediate Accounting
ISBN: 978-1118300855
10th Canadian Edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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