Considering the following information, what is the net benefit if the borrower refinances the loan (benefit analysis, NOT NPV analysis)? Initial Loan balance: 723,000 Initial loan term: 30 years Current Loan interest: 5.75% Remaining term on current loan: 20 years New loan term: 15 years New loan interest: 2.50% Cost of refinancing: 3% of the loan amount Expected holding period: 8 years In Excel
Considering the following information, what is the net benefit if the borrower refinances the loan (benefit analysis, NOT NPV analysis)? Initial Loan balance: 723,000 Initial loan term: 30 years Current Loan interest: 5.75% Remaining term on current loan: 20 years New loan term: 15 years New loan interest: 2.50% Cost of refinancing: 3% of the loan amount Expected holding period: 8 years In Excel
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 14P
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Considering the following information, what is the net benefit if the borrower refinances the loan (benefit analysis, NOT
Initial Loan balance: 723,000
Initial loan term: 30 years
Current Loan interest: 5.75%
Remaining term on current loan: 20 years
New loan term: 15 years
New loan interest: 2.50%
Cost of refinancing: 3% of the loan amount
Expected holding period: 8 years
In Excel
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