Considering the following information, what is the net benefit if the borrower refinances the loan (benefit analysis, NOT NPV analysis)?   Initial Loan balance: 723,000   Initial loan term: 30 years   Current Loan interest: 5.75%   Remaining term on current loan: 20 years   New loan term: 15 years   New loan interest: 2.50%   Cost of refinancing: 3% of the loan amount   Expected holding period: 8 years   In Excel

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.