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Please show excel formulas used Question 1 Suppose you purchased a house 3 years...

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Finance

imagePlease show excel formulas used

Question 1 Suppose you purchased a house 3 years ago and took out a mortgage for $200,000 with a 7.5% interest rate. The mortgage is a 30 year mortgage with monthly payments. Today you can refinance the loan at a 6.5% interest rate for a fee of $7,500. Assume that you would only refinance enough to repay the old loan and the cost of refinancing. Periods Paid Cost Loan Monthly Annual Rate Life (In Years) Amount Payments 7.50% $200,000.00 6.50% Initial Loan 30 36 $ $ 7,500.00 Refinancing 30 0 A - If you refinance by taking a new 30 year loan at the new rate, how much will you save per month? Monthly Savings B-Should you refinance today? Initial Loan Refinance Tip: Use the best interest rate available to you to determine the PV. PV (of monthly payments) NPV of Refinancing Refinance? C- If you expect to move in 3 years, would you want to refinance? Year Months Time Till Move 3 36 Old Loan New Loan Loan Balance at Move NPV of Refinancing Refinance? Tip: You will have to make payments for the years until you move then pay whatever loan balance is left. So consider what the difference in both payments and future value will be

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