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Suppose you take out a 45-year $125,000 mortgage with an APR of 6%. You make payments for 5 years (60 monthly payments) and then consider refinancing the original loan. The new loan would have a term of 15 years, have an APR of 5.2%, and be in the amount of the unpaid balance on the original loan. (The amount you borrow on the new loan would be used to pay off the balance on the original loan.) The administrative cost of taking out the second loan would be $2500. Use the information to complete parts (a) through (e) below. a. What are the monthly payments on the original loan? $ 670.36 (Round to the nearest cent as needed.) b. A short calculation shows that the unpaid balance on the original loan after 5 years is $121,835.53, which would become the amount of the second loan. What would the monthly payments be on the second loan? S (Round to the nearest cent as needed.)

Suppose you take out a 45-year $125,000 mortgage with an APR of 6%. You make payments for 5 years (60 monthly payments) and then consider refinancing the original loan. The new loan would have a term of 15 years, have an APR of 5.2%, and be in the amount of the unpaid balance on the original loan. (The amount you borrow on the new loan would be used to pay off the balance on the original loan.) The administrative cost of taking out the second loan would be $2500. Use the information to complete parts (a) through (e) below. a. What are the monthly payments on the original loan? $ 670.36 (Round to the nearest cent as needed.) b. A short calculation shows that the unpaid balance on the original loan after 5 years is $121,835.53, which would become the amount of the second loan. What would the monthly payments be on the second loan? S (Round to the nearest cent as needed.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 17P
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It has five parts which would be 3 parts left.

Suppose you take out a 45-year $125,000 mortgage with an APR of 6%. You make payments for 5 years (60 monthly payments) and then consider refinancing the original loan. The new loan would have a term of 15 years, have an APR of 5.2%, and be in the amount of the unpaid balance on the original loan. (The amount you borrow on the new loan would be used to pay off the balance on the original loan.) The administrative cost of taking out the second loan would be $2500. Use the information to complete parts (a) through (e) below. a. What are the monthly payments on the original loan? $ 670.36 (Round to the nearest cent as needed.) b. A short calculation shows that the unpaid balance on the original loan after 5 years is $121,835.53, which would become the amount of the second loan. What would the monthly payments be on the second loan? S (Round to the nearest cent as needed.)
Transcribed Image Text:Suppose you take out a 45-year $125,000 mortgage with an APR of 6%. You make payments for 5 years (60 monthly payments) and then consider refinancing the original loan. The new loan would have a term of 15 years, have an APR of 5.2%, and be in the amount of the unpaid balance on the original loan. (The amount you borrow on the new loan would be used to pay off the balance on the original loan.) The administrative cost of taking out the second loan would be $2500. Use the information to complete parts (a) through (e) below. a. What are the monthly payments on the original loan? $ 670.36 (Round to the nearest cent as needed.) b. A short calculation shows that the unpaid balance on the original loan after 5 years is $121,835.53, which would become the amount of the second loan. What would the monthly payments be on the second loan? S (Round to the nearest cent as needed.)
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