Jim and Susie take out a mortage for $130,000 at 8% for 30 years. What are their...

Free

60.1K

Verified Solution

Question

Finance

Jim and Susie take out a mortage for $130,000 at 8% for 30years.
What are their monthly payments?

After 9 years, they decide to refinance with a 7.75% 15 year loan.What are their new monthly payments?

How much will they save by refinancing?

Answer & Explanation Solved by verified expert

4.2 Ratings (741 Votes)

Information provided:

Mortgage= $130,000

Time = 30 years*12= 360 months

Interest rate= 8%/12= 0.6667% per month

PV= -130,000

N= 360

I/Y= 0.6667

Press the CPT key and PMT to compute the monthly payment.

The value obtained is 953.89.

Therefore, the monthly payment is $953.89.

Refinancing:

Mortgage= $130,000 – (108*$953.89)= $26,979.88.

Time = 15 years*12= 180 months

Interest rate= 7.75%/12= 0.6458% per month

PV= -$26,979.88.

N= 180

I/Y= 0.6458

Press the CPT key and PMT to compute the monthly payment.

The value obtained is 253.96.

Therefore, the new monthly payment is $253.96.

Amount saved by refinancing= $953.89- $253.96.

= $699.93.

Therefore, they saved $699.93 in monthly payments.

In case of any query, kindly comment on the solution.

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Jim and Susie take out a mortage for $130,000 at 8% for 30 years. What are their...

Free

60.1K

Verified Solution

Question

Finance

Jim and Susie take out a mortage for $130,000 at 8% for 30years.
What are their monthly payments?

After 9 years, they decide to refinance with a 7.75% 15 year loan.What are their new monthly payments?

How much will they save by refinancing?

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Membership Benefits:

Transcribed Image Text

Other questions asked by students

Jim and Susie take out a mortage for $130,000 at 8% for 30 years. What are their...

Free

60.1K

Verified Solution

Question

Finance

Jim and Susie take out a mortage for $130,000 at 8% for 30years.What are their monthly payments?After 9 years, they decide to refinance with a 7.75% 15 year loan.What are their new monthly payments?How much will they save by refinancing?

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Membership Benefits:

Transcribed Image Text

Other questions asked by students

Jim and Susie take out a mortage for $130,000 at 8% for 30years.
What are their monthly payments?

After 9 years, they decide to refinance with a 7.75% 15 year loan.What are their new monthly payments?

How much will they save by refinancing?