When he purchased his home, AI Silva borrowed $80,000 at 10% interest to be repaid in 25
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To refinance the loan, AI must pay the original lender the balance due on the loan, plus a penalty charge of 2% of the balance due; to the new lender he also must pay a $1000 service charge to obtain the loan. The new loan would be made equal to the balance due on the old loan, plus the 2% penalty charge, and the $1000 service charge. Should AI refinance the loan, assuming that he will keep the house for the next 15 years? Use an annual cash flow analysis in working this problem.
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Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
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