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 11½ 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 8½ years of payments left on her mortgage.
a. How much does Henrietta owe on her mortgage at the time she refinances?
b. If Henrietta refinances her existing mortgage debt by taking out a loan at the new lower interest rate for the remaining 8½ year term, how much is her monthly payment?
c. 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?
d. How much more interest will Henrietta pay if she refinances for 20 years instead of 8½ years?
answer through equation rather than table