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Your existing mortgage with SunTrust is: - Outstanding loan amount: $230,000 • Remaining term: 10 years . Interest rate: 6% • Monthly payment: $2,000 You can refinance your existing mortgage with another mortgage with the following terms: - Loan amount: $230,000 • Term: 10 years . Interest rate: 3% • Monthly payment: $1,936 The prepayment penalty is 3% of the outstanding loan amount, and the cost of refinancing is S What is the payback period of this refinancing mortgage (choose the closest answer)?

Your existing mortgage with SunTrust is: - Outstanding loan amount: $230,000 • Remaining term: 10 years . Interest rate: 6% • Monthly payment: $2,000 You can refinance your existing mortgage with another mortgage with the following terms: - Loan amount: $230,000 • Term: 10 years . Interest rate: 3% • Monthly payment: $1,936 The prepayment penalty is 3% of the outstanding loan amount, and the cost of refinancing is S What is the payback period of this refinancing mortgage (choose the closest answer)?

Intermediate Financial Management (MindTap Course List)
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 3P: Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of...
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Your existing mortgage with SunTrust is: . Outstanding loan amount: $230,000 • Remaining term: 10 years . Interest rate: 6% • Monthly payment: $2,000 You can refinance your existing mortgage with another mortgage with the following terms: - Loan amount: $230,000 . Term: 10 years Interest rate: 3% . Monthly payment: $1,936 The prepayment penalty is 3% of the outstanding loan amount, and the cost of refinancing is S What is the payback period of this refinancing mortgage (choose the closest answer)? O About 230 months About 180 months About 120 months About 110 months
Transcribed Image Text:Your existing mortgage with SunTrust is: . Outstanding loan amount: $230,000 • Remaining term: 10 years . Interest rate: 6% • Monthly payment: $2,000 You can refinance your existing mortgage with another mortgage with the following terms: - Loan amount: $230,000 . Term: 10 years Interest rate: 3% . Monthly payment: $1,936 The prepayment penalty is 3% of the outstanding loan amount, and the cost of refinancing is S What is the payback period of this refinancing mortgage (choose the closest answer)? O About 230 months About 180 months About 120 months About 110 months
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