Please show exactly how to solve this in excel and all steps in excel please. Five years ago, Charles purchased a house for $500,000. Charles borrowed a mortgage with 80% of LTV (loan to value ratio). The interest rate on the mortgage is 5%. Payment terms are being made monthly to amortize the loan over 30 years. Charles has found another lender who will refinance the current outstanding loan balance at 4.0% with monthly payments for 30 years. The new lender will charge two discount points on the new loan. Other refinancing costs will equal $2,000. What is the monthly payment for the current loan? What is the new loan amount if Charles chooses to refinance? What is the monthly payment for the new loan? What is the effective cost of Charles new loan if he holds the loan for 30 years? If Charles wants to refinance today, at least how many years should he stay in the house (do not prepay)? Explain?
Please show exactly how to solve this in excel and all steps in excel please. Five years ago, Charles purchased a house for $500,000. Charles borrowed a mortgage with 80% of LTV (loan to value ratio). The interest rate on the mortgage is 5%. Payment terms are being made monthly to amortize the loan over 30 years. Charles has found another lender who will refinance the current outstanding loan balance at 4.0% with monthly payments for 30 years. The new lender will charge two discount points on the new loan. Other refinancing costs will equal $2,000. What is the monthly payment for the current loan? What is the new loan amount if Charles chooses to refinance? What is the monthly payment for the new loan? What is the effective cost of Charles new loan if he holds the loan for 30 years? If Charles wants to refinance today, at least how many years should he stay in the house (do not prepay)? Explain?
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 6E
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Please show exactly how to solve this in excel and all steps in excel please.
Five years ago, Charles purchased a house for $500,000. Charles borrowed a mortgage with 80% of LTV (loan to value ratio). The interest rate on the mortgage is 5%. Payment terms are being made monthly to amortize the loan over 30 years. Charles has found another lender who will refinance the current outstanding loan balance at 4.0% with monthly payments for 30 years. The new lender will charge two discount points on the new loan. Other refinancing costs will equal $2,000.
- What is the monthly payment for the current loan?
- What is the new loan amount if Charles chooses to refinance?
- What is the monthly payment for the new loan?
- What is the effective cost of Charles new loan if he holds the loan for 30 years?
- If Charles wants to refinance today, at least how many years should he stay in the house (do not prepay)? Explain?
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