The mortgage on your house is five years old. It required monthly payments of $1,422?, had an original term of 30? years, and had an interest rate of 10 %?(APR). In the intervening five? years, interest rates have fallen and so you have decided to refinancelong dash—that ?is, you will roll over the outstanding balance into a new mortgage. The new mortgage has a? 30-year term, requires monthly? payments, and has an interest rate of 6.625% ?(APR).
a. What monthly repayments will be required with the new? loan?
b. If you still want to pay off the mortgage in 25? years, what monthly payment should you make after you? refinance?
c. Suppose you are willing to continue making monthly payments of $1,422.
How long will it take you to pay off the mortgage after? refinancing?
d. Suppose you are willing to continue making monthly payments of $1,422 and want to pay off the mortgage in 25 years. How much additional cash can you borrow today as part of the? refinancing?