1. Henrietta borrowed $250,000 to buy a loft in Hoboken, to be repaid in monthly...
80.2K
Verified Solution
Link Copied!
Question
Accounting
1. Henrietta borrowed $250,000 to buy a loft in Hoboken, to be repaid in monthly payments over 20 years at 3.6% interest. After Henrietta has been repaying the loan for 11 years, interest rates have dropped to 2.4%, so Henrietta decides to refinance her mortgage loan. Note that, at the time of the refinancing, Henrietta has 8 years of payments left on her mortgage.
1a. How much does Henrietta owe on her mortgage at the time she refinances?
1b. If Henrietta refinances her existing mortgage debt by taking out a loan at the new lower interest rate for the remaining 8 year term, how much is her monthly payment?
1c. Suppose instead that Henrietta refinances by taking out a 20-year mortgage on the balance of her existing mortgage debt. Now how much is her monthly payment?
1d. How much more interest will Henrietta pay if she refinances for 20 years instead of 8 years?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
