5 years ago, Diane secured the bank loan of $340,000 to help finance purchase of the loft in San Francisco Bay area. Term of mortgage was thirty years, and interest rate was 7%/year compounded monthly on unpaid balance. As interest rate for the conventional 30-year home mortgage has now decreased to 5.5%/year compounded monthly, Diane is considering of refinancing the property.
i) Find Diane's current monthly mortgage payment?
ii) Find Diane's current outstanding principal?
iii) If Diane decides to refinance the property by securing the 30-year home mortgage loan in amount of current outstanding principal at prevailing interest rate of 5.5%/year compounded monthly, find her monthly mortgage payment?
iv) How much is less Diane's monthly mortgage payment if she refinances?