You currently owe $118,580.44 on your mortgage loan, with an interest rate of 6.8%. Interest rates are currently 6.2% and you are thinking about refinancing, in which case you will borrow $120,000 for 15 years. You will incur loan costs of $2,150 on the new loan (payable in cash when you get the loan). You must also pay a $3,000 prepayment penalty on the old loan for paying it off early. Calculate your real APR on the new loan, assuming you do not pay it off early. с 6.90% 7.04% C 6.71% O 6.80%
You currently owe $118,580.44 on your mortgage loan, with an interest rate of 6.8%. Interest rates are currently 6.2% and you are thinking about refinancing, in which case you will borrow $120,000 for 15 years. You will incur loan costs of $2,150 on the new loan (payable in cash when you get the loan). You must also pay a $3,000 prepayment penalty on the old loan for paying it off early. Calculate your real APR on the new loan, assuming you do not pay it off early. с 6.90% 7.04% C 6.71% O 6.80%
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
Problem 2P: Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for...
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