1.1.1. Considering the following information, what is the NPV if the borrower refinances the loan?...
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1.1.1. Considering the following information, what is the NPV if the borrower refinances the loan? Expected holding period: 10 years Current loan balance: $125,000 Current loan interest: 6.25% Current loan mortgage payment: $1,071.78 Remaining term on current mortgage: 15 years New loan interest: 4.5% New loan mortgage payment: $956.24 New loan term: 15 years Cost of refinancing: $6,000 Assume that the opportunity cost is the interest rate on the new loan (4.5%) A. -$116.52 B. $11,148.38 C. $5,148.38 D. -$6,000.00
Expected holding period: 10 years
Current loan balance: $125,000
Current loan interest: 6.25%
Current loan mortgage payment: $1,071.78
Remaining term on current mortgage: 15 years
New loan interest: 4.5%
New loan mortgage payment: $956.24
New loan term: 15 years
Cost of refinancing: $6,000
Assume that the opportunity cost is the interest rate on the new loan (4.5%)
A. -$116.52
B. $11,148.38
C. $5,148.38
D. -$6,000.00
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